Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://southasiainvestor.blogspot.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Sunday, January 31, 2010

Incompetence Worse Than Graft in Pakistan

"It has been my experience that folks who have no vices have very few virtues" is a quote often attributed to Abraham Lincoln, also known as Honest Abe.

I do not entirely agree with Honest Abe, but what does it mean in Pakistan's context, given the extraordinary and often hypocritical incessant demands for honesty by the nation's TV talking heads? Is competence not as big or bigger virtue than honesty? Is it not Utopia to expect angels to rise to leadership positions in a nation that generally scores badly at all levels on corruption indexes? Is it not better to elect and expect greater competence from the leaders in Pakistan? The kind of competence that delivers good governance for the greater good of society?

Since the beginning of Pakistan's existence as an independent nation in 1947, there has been constant repetition of slogans about piety and honesty by invoking the name of Islam, and its early legendary leaders, particularly great Caliphs like Omar. What is often overlooked is that Caliph Omar was not just impeccably honest; the key reason for his tremendous success as a great leader and highly respected ruler was his extraordinary competence in governance. Can we find a leader like Caliph Omar today? I think it's highly unlikely. However, I do think it is possible to find people who are reasonably competent amongst Pakistanis to help lead the nation to a better future.

Looking around at the recent history of successful leaders in the Islamic world, like Malaysia's Mahathir Mohammad and Indonesia's Suharto, there have been serious allegations of corruption and abuse of power against them. And yet, it is their sufficient competence in delivering good governance to their people that has brought great economic success and remarkable human development to their nations, and ultimately a greater measure of competent democratic governance to their highly literate electorates.

Beyond the Islamic world, there are various levels of corruption found in both developed and developing nations. But many of them have made significant strides in recent years, mainly because the leaders whom they have elected have been far more competent those in Pakistan. Even in Pakistan, whenever the military rulers have brought in technocrats and professionals to help develop and execute good policies, there have been periods of rapid growth. It is their competence, not their unassailable honesty, that has helped them deliver significant economic growth.

Pakistan's average economic growth rate was 6.8% in the 60s (Gen. Ayub Khan), 4.5% in the 70s(Zulfikar Bhutto), 6.5% in the 80s (Gen. Zia ul-Haq), and 4.8% in the 90s (Benazir Bhutto and Nawaz Sharif). Growth picked up momentum in the 21st Century under General Musharraf, and from 2000-2007, Pakistan's economy grew at an average 7.5%, making it the third fastest growing economy in Asia after China and India. There were 2-3 million new jobs created each year from 2000-2007, which significantly enlarged the middle class, and helped millions escape poverty.

Unfortunately, there is a troubling history of the democratic process in Pakistan resulting in the election of leaders who are demonstrably both corrupt and incompetent. After surviving the lost decade of the 1990s under such leaders, and then thriving in this decade under a more competent dictator until 2007, Pakistan has once again returned to the bad old days of the 1990s. The economy is stagnating, inflation is high, there are shortages of everything from food to water and power and security, unemployment is rising, and many are slipping back into poverty.

It would be great if Pakistanis can have both competence and honesty in their leaders. However, I would personally insist on competence to deliver good governance as a minimum criterion for leadership positions, if I can't have both.

Here is my incomplete wish list for the kind of competencies desirable in governing Pakistan at this critical juncture in its life:

1. Motivational Competency: The leadership needs to sell a vision of a secure, peaceful, stable and prosperous Pakistan, and motivate the people to work toward achieving it. It's not going to be easy, but strong motivational skills can help inspire the nation, in spite of the deep skepticism and toxic cynicism that pervades the nation's discourse today.

2. Security Competency: What the leadership needs is a comprehensive strategy using a mix of intelligence capability, political dialog, military force and close monitoring to isolate and defeat those who continue to perpetrate murder and mayhem on the streets of Pakistan. Such a policy must be developed, debated, sold to the people, and constantly refined to produce results.

3. Human Development Competency: No nation can achieve greatness unless its human resource potential is developed and utilized to the fullest. It is a challenge that will require a team of committed and competent professionals with the full backing and the resources of the state to build a public-private partnership for mass literacy campaigns and to provide access to food and health care. Beyond that, there will be a serious focus required to build great institutions of higher learning to develop knowledge based economy for the twenty-first century.

4. Economic Competency: There is a need to build a non-partisan economic leadership team with the best available talent and experience in Pakistan. Such a team should be chartered to come up with policies and programs to spur nation's economic growth to create opportunities for the tens of millions of young people, and to generate the national resources for funding ambitious programs in human and economic development of the nation.

Can our current leadership do it? Their past record is not reassuring. However, if they make a serious effort toward it, and start to show some results, I am confident they will find real support for their efforts in Pakistan. Results from good governance by the politicians will be the best guarantee for the survival of democracy in Pakistan.

69 comments:

well how can you make incompetent as competent?How can you expect competency from corrupts?Comptetency,honesty,truth,intellegence and a lots of other features of human beings are required to perform well in whatever a leader or people in govt do.And they all go hands in hands.

Here's an interesting assessment of Gen Kiyani by analyst-columnist Farrukh Saleem published in the News:

Yes, he is complex, complicated and calculating - all in one. Yes, he has the capacity for abstract thought, cold rationality and coarse creativity - all in one. And, yet he inhales reconstituted tobacco. Yes, he uses a filter and a cigarette holder. Yes, he never takes deep puffs and, yes, he only consumes half a cigarette at a time. I am sure he must have calculated that every cigarette he smokes shortens his life by exactly 11 minutes. And, yet he smokes. I can tell you that he didn't smoke for the first 60 minutes and then went through five half-cigarettes in the following two hours. Cigarettes say a lot about the smoker who smokes them. He knows that some of the things that he is doing are wrong, but still won't give them up. He is hooked on a primary psychoactive chemical and he knows that he can stop but he doesn't.

Hearing what I heard, I can tell you that he is a firm believer in Environmental Determinism - the theory that your environment dictates, and determines, your defense policy. In essence, 6,384 tanks in the Indian Army can't cross the Himalayas into China so they must all be Pakistan-specific. Hearing what I heard I can tell you that he won't second-guess Indian Army's intentions and would keep Pakistan Army fully able and capable to respond to India's military capacity.

I hear that an American who wears four stars and a Bronze Star with Valor V on his chest once told him that Pakistan's nukes were under threat. Hearing what I heard, I can tell you that he must have told the American who wears four stars and a Bronze star with Valor V on his chest that nukes can only be under threat if they are vulnerable; but ours are not vulnerable so they can't be under threat. Please give this bullshit to the press but don't give it to me. After all, he is an ardent golfer and 'an ardent golfer would play Mount Everest if somebody would put a flagstick on top'.

I can tell you that I came back both proud but with a painful realisation; proud knowing that our legions are being led by strategic minds and sad to have discovered the much too visible an intellectual gap between our top political brains in Islamabad and our strategic minds at work in Rawalpindi. And what does he think about our politicians? When it's breezy, hit it easy.

Could it be that the army rules not through the barrel of a gun but because of their intellectual superiority? Could it be that the army rules because our politicians have failed to institutionalise politics? Could it be that the army rules because our political parties do not transcend individual human intentions? Could it be that the army rules because it has structures, mechanisms of social order along with strategic thinking?

There was a piece in NY Times titled "Army Chief Driving Pakistan’s Agenda for Talks" By Jane Perlez.

The gist of the article is that Gen Kiyani worked with the civilian bureaucrats from various departments to develop a coordinated position and strategy ahead of the "strategic dialog" in March 2010 in Washington.

The way I see it is that somebody had to do the job of coordinating Pakistan's strategy and positions ahead of the multi-faceted strategic dialog in Washington covering a wide range of subjects from water to energy and security.

The Army chief has simply filled the vacuum left by lack of competent leadership by civilian politicians in preparing for talks.

Pakistan does have the British legacy of functional institutions such the nation's military and the bureaucracy which have been able to sustain the state. The members of the civil and military services have the basic educational facilities, such as a number of staff colleges and academies, for training them to do their jobs. As a result, the military and civil service officers are reasonably competent in carrying out their assigned responsibilities.

However, no such training exists for the politicians who get elected to the highest positions of leadership in the executive and legislative branches. Under the constitution, they are charged with appointing judges and making and executing laws and policies to solve the nation's problems. Yet, most of them lack the basic competence to understand and appreciate their responsibilities. The parliamentarians are usually uninformed about most of the key issues of governance brought for discussion on the floor. As a result, the level of parliamentary debate is very poor, and important budget priorities and policies are agreed, and laws are passed without fully taking into account all of the issues involved.

There is no effective system of drafting legislation, holding hearings with stakeholders and experts, making budget appropriations, and subsequent oversight by specialized parliamentary committees. People who chair such committees don't have much of a clue as to where to begin, what questions to ask, and how to hold the executive and the bureaucracy accountable. As a result, once the laws and policies are approved, and budgets passed, there is not much oversight or accountability.

There was a proposal in 1998 to set up Jinnah Democracy Institute, named after Pakistan's founding father Qu aid-e-Azam Mohammad Ali Jinnah, who spoke eloquently about democracy when he told military officers, “Never forget that you are the servants of the state. You do not make policy. It is we, the people’s representatives, who decide how the country is to be run. Your job is to only obey the decisions of your civilian masters.”The idea for democracy institute was inspired by the John F. Kennedy School of Government at Harvard University in the United States, and its main purpose was to offer at least one semester of required training to Pakistan's elected representatives. Unfortunately, the proposal has not gone anywhere.

Here's an excerpt from William Dalrymple's book "Nine Lives" about Bhuttos:

Benazir was a notably inept administrator. During her first 20-month-long premiership, she failed to pass a single piece of major legislation, and during her two periods in power she did almost nothing to help the liberal causes she espoused so enthusiastically to the Western media.

Instead, it was under her watch that Pakistan’s secret service, the Inter-Services Intelligence (ISI), helped install the Taliban in Pakistan, and she did nothing to rein in the agency’s disastrous policy of training up Islamist jihadis from the country’s madrasas to do the ISI’s dirty work in Kashmir and Afghanistan. As a young correspondent covering the conflict in Kashmir in the late 1980s and early 1990s, I saw how during her premiership, Pakistan sidelined the Kashmiris’ own secular resistance movement, the Jammu and Kashmir Liberation Front, and instead gave aid and training to the brutal Islamist outfits it created and controlled, such as Lashkar-e-Toiba and Harkat ul-Mujahedin. Benazir’s administration, in other words, helped train the very assassins who are most likely to have shot her.

Benazir was, above all, a feudal landowner, whose family owned great tracts of Sindh, and with the sense of entitlement this produced. Democracy has never thrived in Pakistan in part because landowning remains the base from which politicians emerge. In this sense, Pakistani democracy in Pakistan is really a form of “elective feudalism”: the Bhuttos’ feudal friends and allies were nominated for seats by Benazir, and these landowners made sure their peasants voted them in.

Behind Pakistan’s swings between military government and democracy lies a surprising continuity of elitist interests: to some extent, Pakistan’s industrial, military and landowning classes are all interrelated, and they look after each other. They do not, however, do much to look after the poor. The government education system barely functions in Pakistan, and for the poor, justice is almost impossible to come by. According to the political scientist Ayesha Siddiqa, “Both the military and the political parties have all failed to create an environment where the poor can get what they need from the state. So the poor have begun to look for alternatives. In the long term, these flaws in the system will create more room for the fundamentalists.”

Many right-wing commentators on the Islamic world tend to see political Islam as an anti-liberal and irrational form of “Islamo-fascism”. Yet much of the success of the Islamists in countries such as Pakistan comes from the Islamists’ ability to portray themselves as champions of social justice, fighting people like Benazir Bhutto from the corrupt Westernised elite that rules most of the Muslim world from Karachi to Riyadh, Ramallah and Algiers.

Benazir’s reputation for massive corruption was gold dust to these Islamic revolutionaries, just as the excesses of the Shah were to their counterparts in Iran 30 years earlier: during her government, Pakistan was declared one of the three most corrupt countries in the world, and Bhutto and her husband, Asif Zardari — widely known as “Mr 10%” — faced allegations of plundering the country; charges were filed in Pakistan, Spain, Switzerland, the United Kingdom and the United States to investigate their various bank accounts, and they stood accused of jointly looting no less than $1.4 billion from the state.

In rural Pakistan where about 70% of Pakistanis live, people spend 55% of their income on food, according to a World Resources Institute (WRI) report.

The bottom two BOP (Bottom of Income Pyramid) groups alone account for more than 50% of national food spending in Pakistan. Average annual food spending per household in the BOP in Pakistan is $2,643. While BOP3000 households have 6 times as much income on average, they outspend BOP500 households in the food market by a ratio of only 2:1 in Cameroon, 2.3:1 in South Africa and Pakistan, 2.4:1 in Kazakhstan, 1.9:1 in Uzbekistan, and 3:1 in Peru.

Currently, food inflation in Pakistan is running at 15.49 percent, hitting the poor the hardest.

The detailed analysis of the SPI prices for Jan-10 reveals that few items, within the food category, were observed to post over 100bps MoM increase in prices. Sugar (1.92 percent weight in the CPI) remained exceptional with 19 percent MoM increase and food prices (40.3 percent weight in the CPI) contributed passively this time around to the CPI in Jan-10 due to being relatively stable.

Here's a billion dollar LNG contract scandal uncovered by a complaint of the Fauji Foundation CEO, as reported by The News:

The NA members were told that the petroleum ministry bosses had never recommended to the Economic Coordination Committee (ECC) to give the multi-billion dollar contract to French firm (GDF-SUEZ), whom surprisingly they all were religiously defending now.

It was disclosed that the petroleum ministry had actually recommended the award of the contract to Shell-Qatar, whose bid was higher than the French bid by $1.5 billion. But Shaukat Tarin had thrown this recommendation of the ministry in a dustbin after he learnt that he was being asked to award the contract to a party (Shell), whose bid was higher by $1.5 billion compared to the lowest bidder.

At the end of the hour-long presentation followed by a question-answer session, Chairman MNA Sheikh Waqas Akram, praised the journalist for his comprehensive presentation. Later, MD Fauji Foundation Lt Gen Rab Nawaz was said to have reiterated his old stance that his firm’s bid was the lowest if compared with the GDF-Suez, which was awarded the deal.

Klasra told the committee that his story was based on the minutes of the ECC presided over by then Finance Minister Shaukat Tarin. The minutes had revealed that Tarin had got a telephone call from MD Fauji Foundation that the lowest bid given jointly by FF/Vitol had been rejected and the highest bidder GDF-Suez was given the lucrative contract. Tarin had informed MD FF that he was not aware of any such bidding because the petroleum ministry never shared such information in its official summary tabled before the ECC on Feb 9.

Consequently, Tarin had alarm bells ringing and had ordered a serious probe into the whole issue as to why the bid offered by FF/Vitol was not mentioned in the summary. But the petroleum ministry never replied to the queries of Tarin till he departed from his office at the end of February, much to the satisfaction of the petroleum ministry officials who thought that the issue had been buried but the publication of the scandal by The News shook them.

Petroleum ministry officials had even written a letter to Tarin, informing him that Minister Naveed Qamar had desired that they should not respond to him as he would “personally deal” with this issue. According to Klasra, he had contacted Shaukat Tarin to get his version about these startling developments and the ex-FM had confirmed on record that he was kept in the dark about the joint bid of FF/Vitol, which was claimed to be the lowest.

Tarin confirmed that he got no reply from the Ministry of Petroleum till he left the office. He also claimed that according to his calculation and information, there was a difference of one billion dollars in the bid price of the French company and FF/Vitol, so the country had suffered a loss of a billion dollar.

The irony is that all of them claim that Pakistan’s military should not be involved in major internal decisions when necessary but they never explained why they accepted military help in ascending to power in the first place. Interestingly, despite being discredited as failed and inept, these politicians keep getting second and third chances thanks to the military’s failure to introduce real reforms after every coup. [Also thanks to frequent US and British meddling in our politics for their own objectives. Unfortunately, the Pakistani military has so far been unable to prevent it and, under Musharraf, even took it to new heights!]

Moreover, Pakistani military has maintained an unwritten alliance with this failed political elite, always handing power back to it after every intervention without any attempt to open doors to middle- and lower-class Pakistanis to participate in running their country, especially when they have proven to be more creative in taking Pakistan forward in many areas.

One example is Gen. Musharraf, who came to power with a promise to inject new faces into a stagnant system. Eight years later, he not only failed to do that but ended up restoring some of the worst failed politicians back to power as his replacement. The only credible new political face from the late Musharraf period is Member of National Assembly Marvi Memon. To be fair to her, she was a late entrant who proved her mettle on her own in the two-and-a- half years since Musharraf’s departure. With her patriotic and inclusive views, a large segment of Pakistan’s younger generation identifies with her. But she stands no chance of moving up in a system designed to keep people like her from exercising real power.

THE LOOPHOLE: Mr. Chishti pointed out another irony that exposes the duplicity of the present political elite in Pakistan. An independent Election Commission is what stops military interventionists from legitimizing their rule. So if someone wants to stop future military interventions being endorsed by the country’s courts and parliaments, creating such an independent election commission is the first step. But strangely, despite all the noise over the recent constitutional amendments, called the 18 th Amendment, none of the political parties pushed for an independent election commission. The reason is that an independent election commission would also enforce democracy within the parties, challenging lifetime party presidents and ‘chairpersons’.

COUP DECISION INSTITUTIONAL: He said the decision to impose military rule, or Martial Law, is never a personal decision of one man but a collective one of the Army High Command and is a result of full spectrum assessment of the state of the nation.

WHY MILITARY INTERVENES: Since a military coup is not a one-man-show and hence there is no question of personal ambition, then the right question to ask, says Mr. Chishti, is ‘Why the military intervenes?’ He suggests that tackling the reasons would reduce the possibility of such interventions.

Wise words. But they are falling on deaf ears. The mother of all ironies is that when Pakistan Army has a chief who has gone out of his way to support democracy, and even rescued it on a couple of recent occasions, Pakistan’s democratic warriors are leading the country to a grand national failure of epic proportions with their failure to perform.

Here's a NY Times recent story about Dr. Umar Kundi who was alleged to be involved in Lahore attacks on Pakistan's ISI and Sri Lankan cricket teams:

Umar Kundi was his parents’ pride, an ambitious young man from a small town who made it to medical school in the big city. It seemed like a story of working-class success, living proof in this unequal society that a telephone operator’s son could become a doctor.

But things went wrong along the way. On campus Mr. Kundi fell in with a hard-line Islamic group. His degree did not get him a job, and he drifted in the urban crush of young people looking for work. His early radicalization helped channel his ambitions in a grander, more sinister way.

Instead of healing the sick, Mr. Kundi went on to become one of Pakistan’s most accomplished militants. Working under a handler from Al Qaeda, he was part of a network that carried out some of the boldest attacks against the Pakistani state and its people last year, the police here say. Months of hunting him ended on Feb. 19, when he was killed in a shootout with the police at the age of 29.

Mr. Kundi and members of his circle — educated strivers who come from the lower middle class — are part of a new generation that has made militant networks in Pakistan more sophisticated and deadly. Al Qaeda has harnessed their aimless ambition and anger at Pakistan’s alliance with the United States, their generation’s most electrifying enemy.

“These are guys who use Google Maps to plan their attacks,” said a senior Punjab Province police official. “Their training is better than our national police academy.”

Like Mr. Kundi, many came of age in the 1990s, when jihad was state policy — aimed at challenging Indian control in Kashmir — and jihadi groups recruited openly in universities. Under the influence of Al Qaeda, their energies have been redirected and turned inward, against Pakistan’s own government and people.

That shift has fractured long-established militant networks, which were once supported by the state, producing a patchwork of new associations that are fluid and defy easy categorization.

“The situation now is quite confusing,” said Tariq Parvez, director of the National Counterterrorism Authority in Islamabad, Pakistan’s capital. “We can no longer talk in terms of organizations. Now it’s a question of like-minded militants.”

The result has been deadly. In 2009, militant attacks killed 3,021 Pakistanis, three times as many as in 2006.

The issue is urgent. Pakistan is in the midst of a youth bulge, with more than a million people a year pouring into the job market, and the economy — at its current rate — is not growing fast enough to absorb them. Only a tiny fraction choose militancy, but acute joblessness exacerbates the risk.

In the last two years since the resignation of President Musharraf, the corruption perception has worsened in Pakistan, according to the latest Transparency International Corruption report 2010. Though the 2009 Corruption Survey Report was an eye-opener, but this year it was shocking Khyber Pakhtoon Khawa Province (former N.W.F.P) beat all the provinces and has the highest rate of corruption in Pakistan. Here Here are some of the highlights of this report.

* The report titled the National Corruption Perception Survey 2010 showed a high rise in corruption from 195 billion rupees in the year 2009 to 223 billion rupees in the year 2010. * Bureaucracy and Police had maintained their ranking as the two of the most corrupt departments in public sector in 2010. * Land administration departments were placed third in corrupt practices. * Corruption in the judiciary, local government and education sectors has also increased as compared to the last year. * Syed Adil Gilani chairman of TIP said that about 70 % of people believed that the previous military regime of General Pervez Musharraf was less corrupt then the present Pakistan People's Party (PPP) led coalition government. * In terms of bribery, land administration was the most corrupt sector, where average bribe paid in each incident was 46, 414 rupees. * KPK (NWFP) is highlighted to be the most corrupt of all the provinces.

Like the UK and other countries, India hires it civil service recruits through competitive examinations. But its bureaucrats also face being moved around much more frequently than elsewhere. At least half of those working for the Indian Administrative Service - the country's fabled "steel frame" - spend less than a year in a single position, studies have found.

They can also end up working for India's vast number of state-run factories, hotels and airlines without much experience. So an official administering a small north-eastern state ends up running an ailing airline or a senior policeman can head up a liquor company. Most state-run companies - Air India is a good example - are poorly run, critics say, and perpetually in the red.

Bureaucrats are also hobbled by interference as politicians promote, demote or transfer them at will. There is corruption among a section of officers. Few alternate between state and federal governments, leading to accusations of provincialism in the ranks. More worryingly, some officers are perceived as champions of their religious or caste-based communities and act as "protectors" of their group's interests.

India has a range of forward-looking policies but a poor record on implementing them - for which many say bureaucrats must take a major share of the blame.

It's not as if those in charge are blind to the need for civil service reform: I have counted nearly three dozen reports and committees set up by the government since 1947 to streamline and modernise the bureaucracy. "There is growing concern that our civil services and administration in general have become wooden, inflexible, self-perpetuating and inward-looking," said one government paper.

The question is why does a bureaucracy which does a fine job in some areas - rehabilitating tsunami victims, managing millions at religious festivals, conducting the world's biggest elections - struggle to conduct day-to-day affairs of the state smoothly?

The answer may be simple. India's bureaucrats need to be insulated from political influence, observers say. They deserve transparent appointments and promotions and fixed tenures. The civil service needs a code of ethics. But most important, as one analyst says, is the need to develop a "climate of probity in public life".

By evacuating 250 Pakistani students, and the body one slain Pakistani, in an airlift from Kyrgyzstan, Pakistani government has demonstrated that it cares for its citizens abroad. I see this as a good sign of responsive democratic governance emerging in Pakistan. I hope there will be more signs of it to come, and I expect Pakistani media to continue to play their role in such matters.

Meanwhile, India's foreign ministry has said that 116 Indians - mostly students - were still stranded in southern Kyrgyzstan due to the fighting.

"Everything possible is being done to ensure the safety and well-being of the Indian nationals, within the constraints posed by the difficult ground situation," said the ministry in a statement.

Here are some excerpts from a recent piece "Is the Nation in a Coma?" in the Hindu Businessline by Mohan Murti:

It is a fact that the problem of corruption in India has assumed enormous and embarrassing proportions in recent years, although it has been with us for decades.

In a popular prime-time television discussion in Germany, the panellist, a member of the German Parliament quoting a blog said: “If all the scams of the last five years are added up, they are likely to rival and exceed the British colonial loot of India of about a trillion dollars.”

One German business daily which wrote an editorial on India said: “India is becoming a Banana Republic instead of being an economic superpower. To get the cut motion designated out, assurances are made to political allays. Special treatment is promised at the expense of the people. So, Ms Mayawati who is Chief Minister of the most densely inhabited state, is calmed when an intelligence agency probe is scrapped. The multi-million dollars fodder scam by another former chief minister wielding enormous power is put in cold storage. Prime Minister Manmohan Singh chairs over this kind of unparalleled loot.”

An article in a French newspaper titled “Playing the Game, Indian Style” wrote: “Investigations into the shadowy financial deals of the Indian cricket league have revealed a web of transactions across tax havens like Switzerland, the Virgin Islands, Mauritius and Cyprus.” In the same article, the name of one Hassan Ali of Pune is mentioned as operating with his wife a one-billion-dollar illegal Swiss account with “sanction of the Indian regime”.

A third story narrated in the damaging article is that of the former chief minister of Jharkhand, Madhu Koda, who was reported to have funds in various tax havens that were partly used to buy mines in Liberia. “Unfortunately, the Indian public do not know the status of that enquiry,” the article concluded.

“In the nastiest business scam in Indian records (Satyam) the government adroitly covered up the political aspects of the swindle — predominantly involving real estate,” wrote an Austrian newspaper. “If the Indian Prime Minister knows nothing about these scandals, he is ignorant of ground realities and does not deserve to be Prime Minister. If he does, is he a collaborator in crime?”

The Telegraph of the UK reported the 2G scam saying: “Naturally, India's elephantine legal system will ensure culpability, is delayed.”

This seems true. In the European mind, caricature of a typical Indian encompasses qualities of falsification, telling lies, being fraudulent, dishonest, corrupt, arrogant, boastful, speaking loudly and bothering others in public places or, while travelling, swindling when the slightest of opportunity arises and spreading rumours about others. The list is truly incessant.

My father, who is 81 years old, is utterly frustrated, shocked and disgruntled with whatever is happening and said in a recent discussion that our country's motto should truly be Asatyameva Jayete.

Europeans believe that Indian leaders in politics and business are so blissfully blinded by the new, sometimes ill-gotten, wealth and deceit that they are living in defiance, insolence and denial to comprehend that the day will come, sooner than later, when the have-nots would hit the streets.

Recent survey by Transparency in Pakistan show that the corruption in Pakistan has dramatically increased, according to report in Dawn. Here are some excerpts:

The overall corruption has increased by around Rs28 billion in a year, and more than 70 per cent of Pakistanis say the present government is more corrupt than the previous one, said a Transparency International Pakistan official.

Releasing the findings of the National Corruption Perception Survey 2010 at a press conference at the Karachi Press Club on Tuesday, TIP chief Adil Gillani said that over Rs195 was misappropriated during 2009 while more than Rs223 billion — an increase of Rs28 billion, or about 15 per cent — has been misappropriated during 2010.

He said the survey — jointly financed by the USAID and the Swiss Agency for Development and Cooperation — reveals the perception levels and frequency of corruption faced by the common Pakistanis on a daily basis.

He said an average expenditure on bribery per household this year was Rs10,537, based on a population of over 169.58 million and eight members per family, the cost of bribery comes to Rs223 billion.

Mr Gillani said the departments of police and the power sector had retained their first and second positions, respectively, since 2002. Other corrupt sectors during 2010 were the land administration, education, local government, judiciary, health, taxation, customs and tendering and contracting.

Pakistan at 42nd position

He said Pakistan shared the 42nd position among the most corrupt countries in the world with Bangladesh. India, though located in between and despite being more populous, was less corrupt than both its neighbours and was placed on the 95th position on the chart of corruption.

He said the TIP had developed a 24-page questioner that was put to 5,200 people from all the four provinces. Students of the Institute of Business Administration Karachi carried out the survey in Sindh; Gujranwala University, Gomal University and Sarhad University carried out the survey in Punjab, Balochistan and Khyber Pakhtunkhwa, respectively.

He said the survey found that only the present Punjab government was cleaner than the previous one, while the rest of the governments — federal and three provincial ones — were considered to be more corrupt than their predecessors. The Khyber Pakhtunkhwa government was the most corrupt of the provincial governments, he said.

The TIP chief said the credibility of the country was at the lowest level as almost no funding had been released in the last two years from the Friends of Pakistan fund being managed by the World Bank.

The western media coverage of Pakistan is almost always one dimensional, and sometimes downright venom-filled, as the piece (and its accompanying illustration of scorpion) from the Economist titled "Land of the Impure" shows in abundance. Here is an excerpt from it:

THREE score years and a bit after its founding, Pakistan—which means land of the pure—still struggles to look like a nation. Economically backward, politically stunted and terrorised by religious extremists, it would be enough to make anyone nervous, even if it did not have nuclear weapons. For these shortcomings, most of the blame should be laid at the door of the army, which claims, more than any other institution, to embody nationhood. Grossly unfair? If the army stood before one of its own tribunals, the charge sheet would surely run as follows:

One, a taste for military adventurism on its “eastern front” against giant India, which has undermined security, not enhanced it. No adventure was more disastrous than the one in 1971, which hastened the loss of East Pakistan, present-day Bangladesh. More recently, in 1999, General Pervez Musharraf, then army chief, sent troops into Indian-controlled Kashmir without deigning to inform the prime minister, Nawaz Sharif. Mr Musharraf thus forced a confrontation between two nuclear states. It was an international public-relations debacle for Pakistan. Today the army remains wedded to the “India threat”. India, meanwhile, for all its gross abuses in Kashmir, is more concerned about economic development than invading Pakistan.

Two, endangering the state’s existence by making common cause with jihadism. This policy started with General Zia ul-Haq’s “Islamisation” policies in the late 1970s. After the Soviet Union invaded Afghanistan in 1979, Pakistan (along with the CIA) financed the Afghan mujahideen opposition. The policy turned into support for the Taliban when the movement swept into power in the mid-1990s. Taliban support continues today, even though Pakistan is America’s supposed ally in Afghanistan’s anti-Taliban counterinsurgency. A new report by the London School of Economics claims that not only does Pakistan’s Inter-Services Intelligence (ISI) spy agency finance the Afghan Taliban, but the ISI is even represented on the Taliban’s leadership council. The claims have been loudly rejected, but in private Pakistani military men admit that corners of the army do indeed help the Taliban.

For years both Islamist and liberal generals have also backed jihadists fighting for a Muslim Kashmir. Though vastly outnumbered, the militants have managed to tie down a dozen Indian army divisions. Mr Musharraf and an aide once joked about having such jihadists by their tooti—ie, literally, “taps”, by which he meant their private parts.

Recent acquittals of the accused in high-profile terror cases in Pakistan for lack of evidence are shining light on the incompetence of police investigators and prosecutors in Pakistan. Here are some excerpts from a Dawn editorial on this subject:

The recent spate of acquittals of alleged terrorists has brought into question the authorities’ capacity to investigate and try terrorism-related crimes.

Since April, at least 33 alleged terrorists have been released by anti-terrorism courts, mostly because of lack of evidence. They had been indicted and prosecuted for nine suicide attacks carried out in Islamabad and Rawalpindi in 2007 and 2008, killing more than 150 people.

The latest to be acquitted were six men charged with carrying out bomb blasts at the Islamabad district courts and Aabpara market in July 2007. Earlier on, those charged in four suicide attacks on military targets in Rawalpindi and two bomb attacks on Islamabad’s Marriott Hotel, as well as in an attack on the Kamra Aeronautical Complex in December 2007, had been acquitted. This spate of acquittals by the lower courts was preceded by the Lahore High Court’s overturning of the 2008 conviction of two men for their role in plotting an attack on the then president Pervez Musharraf in Rawalpindi in 2007.

Whether the acquitted were innocent and wrongfully charged, or guilty but acquitted due to lack of evidence, our failure to incapacitate terrorists is obvious. If the acquitted are guilty, it sends out an ominous sign that the state is not serious about bringing the militants to book. Enhanced security is not enough to foil attacks.

Proper investigations resulting in concrete evidence are important to locate the source of a particular terrorist attack. The ability to analyse such data can help prevent future attacks. If we want to make effective use of the criminal justice system to prevent terrorism, a more disciplined approach is needed so that the courts have the needed evidence for convictions. Only then can we hope to have a strong and effective justice system for the hundreds who fall victim to terror attacks each year.

Here's a BBC report about Brookings finding that madrassas are not a major threat in Pakistan:

Islamic schools - or madrassas - in Pakistan are not stoking militancy or extremism, a report by a leading US think-tank has concluded.

The Brookings Institution report says that while religious schools are often cited as a cause of extremism, they "appear not to be a major risk factor".

The report says that fewer than 10% of Pakistani students attended madrassas.

It says that the real cause of militancy in the country is the poor public education system.Urgent priority

Report co-author Rebecca Winthrop, a Brookings fellow, said that number of militant madrassas was not increasing.

She said that most Pakistani parents preferred not to send their children to school at all rather than to enrol them in madrassas.

"We do need to take the militant madrassa issue very seriously," she said at the launch of the report.

"We should really leave the question of the role of Islam in the Pakistan education system to the Pakistanis to debate. This is not something that I think is fruitful if outsiders - us here in the US - start weighing in on."

The study found that the most urgent priority was to increase the supply of schools in Pakistan, where a literacy rate of 56% is among the lowest outside of sub-Saharan Africa.

The researchers said that low enrolment rates were "a risk factor for violence" and that demand for education inside Pakistan "far exceeded the government's ability to provide it".

Furthermore, Pakistan's public school system was "highly corrupt" with teaching positions handed out in return for political favours and teachers paid regardless or whether they turned up for work or not.

"The way the education system is set up is contributing to support militancy," said Ms Winthrop.

"Historically education in Pakistan has been used as a tool by successive regimes in pursuing narrow political ends."

She said that the curriculum and teaching methods in public schools promoted the dissemination of intolerant views and did not prepare students in their search for employment.

The report said that this turn frustrated youngsters and increased the pool of militant recruits.

"The almost exclusive focus on madrassas as a security challenge - which is especially prevalent in the west - needs to be corrected," the report said.

Here's the story of a cat-fight between two of Punjab's women legislators from the PPP, as published in Express Tribune:

Only 12 countries in the world have acted upon the ideological commitment to ensure women’s participation in the formal political arena, as embodied by the Convention on the Elimination of All Forms of Discrimination Against Women and the Beijing Platform for Action. Pakistan is one of them. Under the Local Government Ordinance of 2001, 33 per cent of seats at all tiers of local government and 17 per cent in the national and provincial legislatures were reserved for women. Given the long history of discrimination against women and their exclusion from politics, this was a revolutionary step.

As a result, since elections in 2002 a record number of women have contested the polls and joined the ranks of legislators. However, concerns remained that women are powerless proxies for male relatives but women members of the PPP Punjab Assembly have put to rest any such concerns with great displays of aggression and power.

For far too long we have associated macho deep-throated growling, shouting and name calling in menacing voices with Sultan Rahi but the women MPs of Punjab are not to be left behind.

On June 14, before the budget for the province was presented, PPP MPA Sajida Mir from Lahore said that there was rampant rigging in rural areas where women were heavily influenced by feudals. She praised Iffat Liaquat of the PML-N who had won an election from Chakwal despite not having the backing of the feudal elite. Now this would sound like a fairly normal conversation to you unless you happen to be a feudal from Chakwal.

Luckily MPA Fouzia Behram, belonging to the same party as Ms Mir, was on hand to act the part (or embody the true likeness) of an enraged feudal from Chakwal. Ms Mir bellowed that MPAs from Lahore are ignorant. And in order to truly put the erring non-feudal in her place, she decided to insult her a little more by labelling her with the most derogatory word she could find in her feudal dictionary —“kammi” which means from a low caste. Ms Mir remained calm and reminded the enraged feudal that this insulted not just her but the philosophy of the party that both MPAs represent, not to mention the majority of its supporters since most of them happen to be “kammis”. This further enraged Ms Behram who then charged towards Ms Mir and tried to slap her.

Ladies, in this day and age of political crisis and misery for the entire country, couldn’t you maybe reserve your passions for topics of greater importance and substance like the budget, the state of education, healthcare or inflation? And could you please try and take the job of legislating on behalf of your constituents a little more seriously than the men who have failed us for so many years?

Here's an interesting opinion by a ferozk at Chowk.com about bad governance being the biggest problem in Pakistan:

In the days ahead, Pakistan's major problem will not be so much as terrorism, or hyper-inflation or a progressively victimized and ignored electorate, but the issues of misgovernance. This issue will compound all the other issues facing and challenging Pakistan and in the process, accelerate the dystopian nature of the Pakistani polity into a complete failure. Pakistan is suffering from an unimaginable crisis of a lack of governance, because there is no government in Pakistan. Period.

It seems that elections of 2008 did not elect a government to power as much as it installed a political party into power. Pakistan Peoples Party is a dysfunctional party, whose loyality is divided between the idolized cult of Benazir Bhutto and the dread of Asif Ali Zardari. Its leadership is centralized within the cabal that supports Asif Ali Zardari and runs the country from the presidency, law ministery and the interior ministery in Islamabad. All the laws and decisons, which affect Pakistan are made in the presidency and the parliament, which is supposed to be the sovereign voice of the people of Pakistan, is ignored.

The government itself is confused. It claims to be a parliamentary government headed by a prime minister but yet appeases a presidential rule. Its ministers are dogged by allegations of corruption made worse by the fact that they are generally incompetent and mostly self-serving individuals. In the last two and a half years that this government has been in power, other than increasing its own sphere of power through the Eighteen Amendment, it never offered a solution to the problems faced by the people. Its battles in the parliament and its policies are designed to prolong its hold on power.

Its silent partner and accomplice in the fraud being perpetuated on the Pakistani people is the Pakistan Muslim Leaque - Nawaz. The PML-N is also confused. Its leader, Nawaz Sharif, seems to be out of his depth, because he only wants to be the prime minister for a third time and does not wish to harm his changes of attaining that position. Nawaz Sharif, like other Pakistani politicans, is a bad leader not because he makes awful decisions, but because he makes no decisions at all! Nawaz Sharif generally follows the politics in Pakistan, hoping to exploit them for his benefit, instead of shaping the politics of Pakistan. In true sense of the word, he is more of a follower than a leader and that too a stunted bonzai leader groomed by his patron the Pakistani military.------------------Still, this government has to be given the chance to do nothing till 2013, because it will make the people realize the value of their vote and that they should not vote for a political party on the basis of sympathy, but what it will do for them once elected! Since 2008, the people of Pakistan have matured as far as their understanding of what democracy is and for many clowns in power; this is perhaps their last ride on the merry-go-round of power. Granted that there will be slips, but the levels of political expectations in Pakistan are increasing and with that comes a sense of accountibility to hold those in power responsible.

Here's a New York Times quoting Riyaz Hussain Naqvi, a retired government official who worked in tax collection for 38 years, as saying, “This is a system of the elite, by the elite and for the elite. It is a skewed system in which the poor man subsidizes the rich man.”

The problem starts at the top. The average worth of Pakistani members of Parliament is $900,000, with its richest member topping $37 million, according to a December study by the Pakistan Institute of Legislative Development and Transparency in Islamabad.

While Pakistan’s income from taxes last year was the lowest in the country’s history, according to Zafar ul-Majeed, a senior official in the Federal Board of Revenue, the assets of current members of Parliament nearly doubled from those of members of the previous Parliament, the institute study found.

The country’s top opposition leader, Nawaz Sharif, reported that he paid no personal income tax for three years ending in 2007 in public documents he filed with Pakistan’s election commission. A spokesman for Mr. Sharif, an industrialist who is widely believed to be a millionaire, said he had been in exile and had turned over positions in his companies to relatives.

A month of requests for similar documents for Pakistan’s president and prime minister went unanswered by the commission; representatives for the men said they did not have the figures.

“Taxes are the Achilles’ heel of Pakistani politicians,” said Jahangir Tareen, a businessman and member of Parliament who is trying to put taxes on the public agenda. He paid $225,534 in income tax in 2009, a figure he made public in Parliament last month. “If you don’t have income, fine, but then don’t go and get into a Land Cruiser.”

The rules say that anyone who earns more than $3,488 a year must pay income tax, but few do. Akbar Zaidi, a Karachi-based political economist with the Carnegie Endowment, estimates that as many as 10 million Pakistanis should be paying income tax, far more than the 2.5 million who are registered.

Out of more than 170 million Pakistanis, fewer than 2 percent pay income tax, making Pakistan’s revenue from taxes among the lowest in the world, a notch below Sierra Leone’s as a ratio of tax to gross domestic product.

There have been widespread allegations that Pakistani feudals, including many powerful politicians, deliberately flooded the poor peasants villages to protect their own crops and farms in recent monsoon rains. Here's a BBC report that says Pakistan's US ambassador is calling for an investigation.

A senior Pakistani diplomat has called for an inquiry into allegations that rich landowners diverted water into unprotected villages during the floods to save their own crops.

UN ambassador Abdullah Hussain Haroon said there was evidence that landowners had allowed embankments to burst.

This led to waters flowing away from their land, he said.

More than 1,600 people have died in the floods, which have affected about 17 million people.

"Over the years, one has seen with the lack of floods, those areas normally set aside for floods have come under irrigation of the powerful and rich," Mr Haroon told the BBC's HardTalk programme.

"It is suggested in some areas, those to be protected were allowed, had allowed, levies to be burst on opposite sides to take the water away. If that is happening the government should be enquiring."

At the height of the floods, it is estimated that one-fifth of the country - an area the size of Italy - was underwater.

The flood waters are beginning to drain away to the Arabian Sea but inundations continue in parts of Sindh province.

ISLAMABAD: A comparative analysis of the assets declared by members of the National Assembly (MNAs) belonging to the 12th and the 13th National Assemblies reveals that the average value of an MNA’s assets has increased threefold during the past six years (2002 to 2009).

According to a report titled ‘How Rich are Pakistani MNAs?’ released by the Pakistan Institute of Legislative Development and Transparency (PILDAT), the average value of an MNA’s assets in the previous National Assembly was just below Rs 27 million. However, this value rose to Rs 81 million in 2008-09, a threefold increase in six years.

The analysis also indicates that an average MNA of the current National Assembly is twice as rich compared to his/her counterpart in the previous assembly.

The findings are based on assets declared by MNAs for the years 2003 to 2006, 2007 to 2008 and 2008 to 2009 through three separate reports. The latest of this series of reports, comparing assets declared by MNAs belonging to the current National Assembly, has used data contained in the gazettes published by the Election Commission of Pakistan on October 15, 2008 and October 27, 2009.

The report puts the current average value of assets held by an MNA at Rs 80.89 million, based on the 2008-09 declarations. This figure demonstrates an increase of 9.5 percent from the 2007-08 figure of Rs 73.92 million. The average value of assets owned by non-Muslim MNAs (Rs 20.35 million), is 75 percent lower than the overall average of almost Rs 81 million.

According to the previous year’s declarations, Mehboobullah Jan had assets of Rs 3.252 billion, followed by PML-N’s Nuzhat Sadiq with total assets of Rs 1.514 billion, PPP’s Chaudhry Zahid Iqbal from Punjab with assets amounting to Rs 1.248 billion, PML-Q’s Chaudhry Nazir Ahmed Jatt from Vehari with assets worth Rs 843 million and Jahangir Khan Tareen with assets amounting to Rs 716 million.

At the other end of the spectrum, MNAs with the least assets in 2008-09 were: PPP’s Saeed Iqbal Chaudhry from Punjab with approximately Rs 29 million net liabilities, followed by PPP MNA Roshan Din Junejo from Sindh, PML-N’s Sheikh Rohale Asghar, PPP’s Ghulam Farid Kathia and PML-N’s Ayaz Amir.

It seems that in India, too, the Army is more honest and competent than the civilians. Here's a rediff report about rapid rebuilding of the collapsed footbridge at Commonwalth Games in Delhi:

It took seven years and Rs. 5 crore for a company to build a Foot Over Bridge (FOB) near the Jawaharlal Nehru [ Images ] Stadium, which then collapsed. The Indian Army [ Images ], which was called in to salvage the Delhi's [ Images ] pride and build a temporary FOB, has done the same job in four days flat and at a fraction of the original cost.

The Indian Army is now applying finishing touches to a Bailey Bridge, after a desperate Commonwealth Games [ Images ] Organising Committee and the Delhi government called them in to erect the temporary structure. The Bailey bridge will be used by spectators to reach the stadium after parking their cars at Safdarjung Airport.

Army officials said that the main structure had been erected by Monday evening, with three piers of varying heights under 20-feet each fixed to support the bridge. Jawans were seen hard at work on the steps going down to the stadium, which technically is the only work remaining to be done. The steps from the parking lot to the bridge had been put in place on Monday. The 12-feet floor of the bridge has also been put in place.

Security personnel from the Delhi police and the Army were seen guarding the worksite. Traffic police had also been deployed to control the traffic on the elevated Barapullah Nullah road to allow the army to carry on with their work.

Over 700 combat engineers from The Madras Engineer Group, informally known as the Madras Sappers (a regiment of the Corps of Engineers of the Indian Army) began work on the bridge on Saturday afternoon. The Indian Army and the Delhi government had said that the bridge, which has three piers and have four spans spread over 250 feet, was expected to be delivered in five days.

"We will conduct a mandatory security test before handing over the bridge.The only addition to a standard Bailey bridge is the insertion of three piers, which we did for safety," Commanding Officer, Colonel Dinesh Khanna told rediff.com

The Bailey bridge is being built at the exact spot where its collapsed predecessor stood. The concrete pillars on either side of Barapullah Nallah road were not damaged when the earlier bridge collapsed and the Bailey bridge will use these pillars as its base, Khanna said.

A Bailey bridge is a temporary military structure used for relief operations like flood or collapsed bridges. All its components are made of metal and are portable. The newly constructed Bailey bridge will be able to accommodate more people than what was estimated of the collapsed bridge, Khanna said.

"The floor of the bridge is about 12-feet wide and can even accommodate vehicles. It will be able to take the weight of more spectators than the current estimates," Khanna added.

The decision to erect the temporary structure was taken after security agencies told civic agencies that the walking route from the parking to the stadium without the bridge would be about a kilometer long.

The 95 metre-long hanging foot-over bridge had collapsed on September 21, injuring 27 people. The bridge was being built along with another over bridge at the cost of Rs 10.5 crore by Chandigarh-based company PNR Infra, which has been blacklisted by the Delhi government.

Here's NY Times reporting military demanding government shakeup in Pakistan:

ISLAMABAD, Pakistan — The Pakistani military, angered by the inept handling of the country’s devastating floods and alarmed by a collapse of the economy, is pushing for a shake-up of the elected government, and in the longer term, even the removal of President Asif Ali Zardari and his top lieutenants.

The military, preoccupied by a war against militants and reluctant to assume direct responsibility for the economic crisis, has made clear it is not eager to take over the government, as it has many times before in Pakistan, military officials and politicians said.

But the government’s performance since the floods, which have left 20 million people homeless and the nation dependent on handouts from skeptical foreign donors, has laid bare the deep underlying tensions between the military and the civilian leadership.

American officials acknowledge that it has also left them increasingly disillusioned with Mr. Zardari, a now deeply unpopular president who was elected two-and-half years ago on a wave of sympathy after the assassination of his wife, Benazir Bhutto.

In a series of meetings with the civilian leaders, the army chief, Gen. Ashfaq Parvez Kayani, scolded the president and his prime minister, Yousaf Raza Gilani, for incompetence and corruption in the government, according to officials familiar with the conversations.

The general also demanded that they dismiss at least some ministers in the oversized 60-member cabinet, many of whom face corruption charges from past cases.

The civilian government has so far resisted those demands, and Mr. Zardari told the general that, come what may, he will not be maneuvered aside, according to a Pakistani official close to the president who was familiar with the conversations but did not want to be identified.

After a meeting between Mr. Zardari, Mr. Gilani and General Kayani on Monday, the president’s office issued a statement saying they had agreed “to protect the democratic process and to resolve all issues in accordance with the constitution.”

“Sanity had prevailed,” the Pakistani official said, meaning that General Kayani chose not to precipitate a crisis.

Still, it is clear that General Kayani, head of the country’s most powerful and respected institution, has ratcheted up the pressure on the government in the past several weeks.

Having secured an exceptional three-year extension in his post from Mr. Zardari in July, General Kayani appears determined to see to it that the government prevents the economy from entering a tailspin, which would further weaken the health of the nation and also the value of the military’s own vast landholdings and other business enterprises.

Military officers in the main cities have been talking openly and expansively about their contempt for the Zardari government and what they term the economic calamity, an unusual candor, reporters and politicians said.

“The gross economic mismanagement by the government is at the heart of it,” said Rifaat Hussain, a professor of international relations at Islamabad University and a confidant of the military. “And there is the rising public disaffection with the Pakistani Peoples Party under Zardari and Gilani.”

As the military demands the overhaul, the Supreme Court is also pushing the government on the issue of corruption by threatening to remove the president’s immunity from prosecution, a move that would expose him to charges of corruption in an old money-laundering case in Switzerland.

But he vowed to galvanise Pakistanis and fight a "jihad against poverty, hunger, illiteracy and backwardness".

Correspondents say there is no real likelihood of him returning soon.

Mr Musharraf also appears to lack the kind of political organisation that could win him an election in Pakistan, they say.'National salvation'

Mr Musharraf unveiled the All Pakistan Muslim League at a gentlemen's club in Whitehall.

There was tight security, with checks on all those entering the room.

Mr Musharraf apologised for some of the actions he took when in power.

"I am aware of the fact that there were some decisions which I took which resulted in negative political repercussions, repercussions which had adverse effects on nation building and national political events, and my popularity also, may I say, plummeted in that last year. I take this opportunity to sincerely apologise to the whole nation."

Mr Musharraf attacked the "total despondency and demoralisation and hopelessness which prevails in society today".

He added: "The time has come to redeem our pledge... to ensure the fruits of freedom are shared by all. The time has come for a new social contract to keep the dream of our forefathers alive... to make Pakistan into a progressive Islamic state for others in the third world to emulate."

Mr Musharraf said he wanted a party of national salvation that would "galvanise all Pakistanis regardless of religion, caste or creed".

Punctuated by chants from supporters, he added: "It is time to unfurl a Muslim league umbrella for all - this umbrella for all shall be the All Pakistan Muslim League."

The former army chief, who now lives in London, earlier told the BBC: "When there is a dysfunctional government and the nation is going down, its economy is going down, there is a clamour, there is a pressure on the military by the people."

He said he was launching the party in London because he risked assassination if he returned to Pakistan. He has survived a number of plots in the past.

Last month, Mr Musharraf told the BBC he would be standing for a seat in the 2013 parliamentary elections. From there he said he hoped to become either prime minister or president.

He made London his base, as a number of Pakistani politicians have done over the years, after his allies lost elections and he was ousted as president in 2008.

If he does go home, he faces legal cases, which he says are politically motivated.

Mr Musharraf seized power in 1999 when, as chief of Pakistan's army, he ousted elected Prime Minister Nawaz Sharif in a coup.

Here's a Times of India report on real state scandal involving Indian politicians, bureaucrats and generals:

NEW DELHI: The Mumbai-headquartered Western Naval Command (WNC) has raised serious security concerns and sought action by the navy, army and government against a highrise apartment complex in Mumbai's Colaba area, in which senior military leaders, politicians and bureaucrats own apartments. Among those allotted houses in the 31-storeyed Adarsh Housing Society are two former army chiefs, several other generals and admirals, and political leaders and senior bureaucrats.

A recent letter to the navy chief from Vice-Admiral Sanjeev Bhasin, Flag Officer Commanding-in-Chief, WNC, and other documents with TOI reveal a conspiracy to appropriate, in the name of war widows and military veterans, a prime plot that was in the army's custody for years. In the process, the army even lied to the ministry of defence (MoD), which then misled Parliament, when a starred question regarding the ownership of the land came up in 2003.

Almost every army officer involved in misleading Parliament now owns a house in the complex. In his letter, Admiral Bhasin says that the housing society is now refusing to part with the list of its members and the Maharashtra government too does not have the details.

The building, immediately adjacent to a planned helipad and other military installations, has violated the CRZ ( coastal regulation zone) limit of a maximum height of 30 metres, and has now gone up to 100 metres, says Bhasin inhis letter dated July 5 of this year. The Western Naval Command chief has suggested that the army be asked to institute a formal inquiry to find out duplicity, if any, by serving/retired officers in reappropriation of the ecological park managed and occupied by HQ MG&G (headquarters, Maharashtra, Gujarat and Goa) Area since 1996. He also wants the MoD to take up the issue with the Maharashtra government and ensure that further construction is stopped and occupancy permission is not given.

The controversy fundamentally hinges around whether the plot of land belonged to the army or not and in this matter, several senior army officials were more than cooperative in declaring that it did not. Crucial documents that prove the army's possession of the land and the Maharashtra government's past commitment to give the plot to the army have gone missing from the records of the concerned army offices in Mumbai and Pune. TOI now has many of those documents. When we sent a detailed questionnaire based on these undisclosed facts to the army headquarters a few weeks ago, the only reply was, "We are looking into all aspects brought out by you."

Read more: Top generals, babus & netas in land-grab - The Times of India http://timesofindia.indiatimes.com/india/Top-generals-babus-netas-in-land-grab/articleshow/6805880.cms#ixzz13Np5thJI

The latest Transparency International report says corruption has significantly increased in Pakistan during the last two years. Pakistan has slipped from 134th place in 2008, to 139th in 2009 and 143rd in 2010:

KARACHI: Pakistan's decline continue in Corruption Perceptions Index (CPI) and now its Index Score is 2.3 against 2.4 in 2009, and out of 178 countries, its ranking as most corrupt country has slipped 7 ranks, from 42 in 2009 to 34 most corrupt country in 2010.

The 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious corruption problem.

Syed Adil Gilani, Chairman TI Pakistan said in last two year there have been unprecedented cases of corruption involving tens of billions of rupees in public sector organization, which under the Rule of Law, should have been taken up by the National Accountability Bureau.

He said the political will of the government to fight corruption is lacking which has resulted in the Supreme Court of Pakistan to take suo moto action against mega corruption in NICL, Pakistan Steel, Rental Power Plants.

The CPI 2010 reveals that corruption in Pakistan is increasing, while in Bangladesh it is decreasing. Bangladesh was perceived to be the most corrupt country in 2001, 2002 and 2003 and its ranking in 2010 is 39 most corrupt country.

Reduced corruption has paid dividends to Bangladesh whose annual GDP growth last year was over 5%, while Pakistan's GDP growth last year was near 2.4 %. Delay in formation of An Independent Accountability Commission by the parliament may further aggravate the situation.

Chairman TI Pakistan said that the Supreme Court of Pakistan, which has a declared policy of Zero-Tolerance for Corruption on 22 March 2009, in its order of 12th October, 2010 in NICL Case No.18 of 2010 involving six procurements is considers the Violation of Public Procurement Rules 2004 as a criminal act. It is a landmark order, treating violation of Public Procurement Rules 2004 as a federal crime and it will help reduction in Corruption.

The direct impact of increased corruption is witnessed in the rise in the prices of food commodities which according to the latest official data of Federal Bureau of Statistics, have increased up to 120 percent in last one year viz. sugar from Rs 54 to Rs 80, pulses from Rs 50 to Rs 110, eggs from Rs 35 to Rs 60, and the Foreign Direct Investment for the fiscal year 2009-2010 dropped to US $ 2.21 billion from US$ 3.71 billion in FY 2008-2009, and in July-Sept 2010 it is further dropped to US $ 387.4 million ( 68% of last year).

Foreign debt on Pakistan increased from US $ 40 Billion in 1999 to US $ 46 billion in 2008, whereas in last two years it has increased to US $ 53.5 billion.

Across the board Application of Rule of Law, Merit based appointments and easy Access to Justice is the only solution to save Pakistan from corruption, which is responsible for poverty, inflation, terrorism, illiteracy, lack of electricity and hording of essential food commodities.

In the 2010 CPI, Denmark, New Zealand and Singapore tie for first place with scores of 9.3. Unstable governments, often with a legacy of conflict, continue to dominate the bottom rungs of the CPI. Afghanistan and Myanmar share second to last place with a score of 1.4, with Somalia coming in last with a score of 1.1.

The Transparency International Pakistan (TIP) has claimed that it has identified corruption cases worth Rs 300 billion in different federal government departments during the last one year.

Expressing his disappointment, Chairman TIP Syed Adil Gillani said that there was no effective accountability process in Pakistan due to which corruption was on the rise. He said that the TIP referred a number of corruption cases to the National Accountability Bureau (NAB), one of Pakistan's controversial departments, but it did not initiated so far a single case against the perpetrators.

"Only the Supreme Court of Pakistan, the Public Accounts Committee of the National Assembly and the Public Procurement Regulatory Authority (PPRA) took notice of some of these corruption cases," he said.

The report released by TIP on Tuesday indicates that Pakistan is all set to hit further lows amongst the world's most corrupt nations. The 2009 report showed Pakistan climbing five numbers from the previous 47 to become the 42nd most corrupt country in the world.

Amongst the major corruption cases, Gillani said the Rental Power Projects (RPPs) of the government, was on the top. The government awarded 14 contracts in violation of the PPRA rules which caused a loss of over US$ 2 billion. The TIP had also written to the Supreme Court on this case of massive corruption and irregularity.

The sale and procurement policy of the Pakistan steel Mills had caused a reported loss of Rs 22 billion due to corruption. This corruption case had already been taken up by the apex court.

Gilani also informed of about the alleged violation of Pubic Procurement Rules 2004 by Pakistan Railways in the tender for procurement of 150 locomotives, only US made, which might have caused a loss of at least Rs 40 billion to the national exchequer. The project, he said, is presently on hold.

The other departments involved in mega corruption cases, according to Gillani, include Pakistan's Oil and Gas Development Company (OGDCL), National Insurance Corporation Limited (NICL), PRIMACO (Pakistan Real Estate Investment and Management Company Ltd), National Highways Authority (NHA), Trade Development Authority of Pakistan (TDAP), Pakistan Electric Power Company (PEPCO), Employees Old-age Benefit Institution (EOBI). Pakistan's Oil and Gas Development Company Limited made headlines in the recent past when Prime Minister Gillani appointed his jail mate and a convict who was not even a graduate as its managing director.

Here's Pakistani economist Dr. Ashfaque H. Khan writing about "Pakistan: a forgotten economy" in a piece published by The News:

How has that economy been transformed into a forgotten one in just three years? Unfortunately, the economy never featured on the radar screen of the present government. Additionally, the government lacked a credible economic team. In less than three years there have been four finance ministers, four finance secretaries and three governors of the State Bank.

The government wasted time and energy in downplaying the achievements of the previous government, while it lurched from one crisis to another, a rudderless ship with no sense of direction and purpose. The current economic team is weak and lacks the capacity to handle the multidimensional challenges it is confronted with, most of which are self-created.

The country’s economic growth has slowed to an average of three per cent per annum, and unemployment and poverty have risen. Higher double-digit inflation has persisted and items of basic necessity have gone beyond the reach of the common man. The debt burden has reached unsustainable levels and the dependence on donors has grown. Clearly, three years of mis-governance and poor economic management have brought the economy to near-standstill. People have lost confidence in the country’s ability to recover from the ever-deepening economic crisis. The recent unprecedented floods have further aggravated the impact of the economic ills.

It is not only the economy which is in decline. This is true of things in every walk of life. To name just a few, this has been evident in the game of cricket, the inaugural parade at the Commonwealth Games, the Haj operations, the creation of the sugar crisis, the running of public-sector enterprises like PIA, Pakistan Railways, the Steel Mills, National Insurance Corporation and TCP, the crisis in higher education, the deterioration in law and order and the debacle of the recently concluded Pakistan Development Forum (PDF).

The PDF meeting requires special mention. The PDF, the reincarnation of the Aid to Pakistan Consortium, is jointly chaired by the World Bank and the Government of Pakistan, represented through its finance minister. The purpose of this forum is to provide a platform to the government where it can present its economic and social reforms agenda before visiting delegations. The PDF has never been a platform for pledging assistance. Unfortunately, this forum was transformed into a pledging forum because every minister, even the prime minister, made statements about the financial loss caused by the floods and asked for financial support. The minister of interior even pleaded for a debt write-off.

It is unfortunate that we have turned every international forum, including Friends of Democratic Pakistan (FODP), into an opportunity for begging. No self-respecting nation begs forever. A beggar cannot command respect in the comity of nation. Continuing to do so, Pakistan risks nothing less than global oblivion. How long can we keep on begging like this? Is this the fate to which the people of Pakistan must resign themselves?

Ibrahim received a master's degree in economics, an MBA and a PhD in geopolitical strategy at Cambridge University. He is currently a research scholar at Harvard University's Kennedy School of Government, and has been named an "emerging global leader" by Yale University's World Fellows Program and an "ideas scholar" at the recent Aspen Ideas Festival. He also was a paratrooper in the British Army and speaks four languages --- English, Arabic, Punjabi and Urdu.

An edited transcript of the conversation follows.

Arabic Knowledge@Wharton: What did Pakistan's government ask you to do in terms of economic strategy?

Azeem Ibrahim: My friend, Dr. Nadeem-Ul-Haq, who was a key economist at the International Monetary Fund (IMF), asked me to help him out. We were talking about setting up the first think tank in Pakistan, specifically to concentrate on economic development. We had a number of discussions about it before he left for Pakistan. A few days later, he called me [in May] and said, "Listen, I've just been appointed head of the Planning Commission and I'd like you to be a key adviser." We had a couple more discussions about it, and we thought the focus should be to encourage a more entrepreneurial and innovative environment in Pakistan. I thought I would give him some advice and that would be it, but what he had in mind was a little more ambitious. He said, "We have to write a whole new national economic strategy from a blank slate."---------Arabic Knowledge@Wharton: You mentioned in other interviews six main points you envision for Pakistan's economic recovery, including identifying people with business acumen. Can you expand on that point and tell me about the other points?

Ibrahim: I believe entrepreneurs are people who have the imagination to recognize a new product, process or service, and possess the ability to make their ideas happen. Entrepreneurs, and the new businesses they create, are the engines of economic growth and job creation, which in turn underpin political stability and the growth of a civil society.

To that end, we can identify experienced and potential entrepreneurs through schools, colleges, science and technology institutes, and civic organizations. We would seek entrepreneurs from "no-tech" and "low-tech" businesses, like agriculture, handicrafts and tourism, as well as high-tech businesses. We would work closely with development agencies, which have access to many "feeder" organizations to identify entrepreneurs.

The second point is to train and encourage entrepreneurs through domestic and international programs, varying from two-week boot camps to multi-month immersion programs. Third, we want to help develop networking, mentoring, incubation and acceleration programs. One example would be to establish an entrepreneur-in-residence program, which would include entrepreneurs from the diaspora who are familiar with Pakistani language, culture and business. Also, we'd like to establish a web-based backbone, with mentor-mentee matching as well as a contacts list for services, similar to Craigslist.

Funding, of course, is important, and that is my fourth point. We want to engage private sources of finance to provide funding for start-up ventures, including the creation of angel investor networks. We want to find the best possible partners to mentor young entrepreneurs and help them develop funding strategies and learn how to make the best possible presentations to potential funders or investors.

My fifth point is to combine diplomatic advocacy and foreign assistance to reform financial, legal, policy and regulatory impediments to private-sector development, and help entrepreneurs get access to early-stage capital.

Lastly, we want to promote the accomplishments of local entrepreneurs, who can be role models. .....

..Molly (Kinder) adds that aid money could make a real difference in how well and how quickly Pakistan is able to recover from the floods. As Molly, Nancy (Birdsall) and Wren have written, redirecting unspent aid money towards flood reconstruction could bolster Pakistan’s economy at a critical moment and lay the foundation for poverty-reducing growth when and if the necessary domestic policy reforms are enacted. We discuss ways to make that aid transparent and to ensure that it isn’t diverted for other purposes.

As Molly and I spoke, top officials from the Pakistani government were in in town for the third set of so-called Strategic Dialogue meetings with their American counterparts. We at the Center got just a taste of those meetings when we hosted Pakistani Finance Minister Abdul Hafeez Shaikh for a private breakfast with members of Washington’s Pakistan policy community and U.S. government representatives. Shaikh’s talk and his savvy about both economic policies and politics impressed all those who attended, but Molly warns that while Pakistan has a full team of skilled economists in the top ranks of government, knowing what needs to be done and managing to overcome the substantial obstacles to reform are two separate issues. Molly adds: the finance minister “rightly identified the challenge, which is how can you create the political momentum within Pakistan to enable these very difficult reforms to happen?”

Here is an excerpt from a Time magazine opinion piece by Hannah Beach on the status of Asian democracies:

Asia gave birth to people power in 1986, when a sea of yellow-clad demonstrators peacefully overthrew a dictator in the Philippines. Other popular uprisings against authoritarianism followed, from Thailand, South Korea and Taiwan to Mongolia and Indonesia. Watching the events unfold in the Arab world, Asia's fledgling democracies can be forgiven for indulging in a moment of nostalgia. While revolutionary zeal may have toppled the region's strongmen, however, too few of their successors have bothered to build the institutions needed to sustain democracy beyond its first flush. Democracy through revolution is heady stuff, but it's not always a template for building lasting freedom and justice.

The withered potential of people power is best examined on its home turf. This month, the Philippines will celebrate the 25th anniversary of the start of its historic uprising. Those following the events in Egypt will find many parallels. Ferdinand Marcos, a corrupt, aging, U.S.-backed dictator, was ousted by a populace that rallied, in part, thanks to technology. (Then it was radio, not Facebook or Twitter.) But a quarter-century later, with the son of people-power heroine Corazon Aquino now serving as President, the Philippines is still beset by the poverty, cronyism and nepotism that provoked the 1986 protests. (See a brief history of people power.)

These failings are not the Philippines' alone. Across Asia, elections are held, but vote buying taints the results. Politics is dominated by the same old families. Economic growth often rewards the few rather than the many. And from Malaysia and East Timor to Taiwan and Thailand, I have met local journalists who passed information on to me because they felt it was too dangerous to write about the issues themselves. Without the crucial check of a free press — or independent legislatures and courts, for that matter — democracy exists in name only.

Still, Asia also offers heartening lessons for the Arab world. There's South Korea, for instance, which overthrew a U.S.-backed military dictatorship, then carefully constructed a prosperous democracy. And then there's Indonesia, the world's largest Muslim-majority nation. In 1998, after 32 years in power, strongman Suharto was forced out by massive street protests. Since then, change in Indonesia has occurred not in one cataclysmic jolt but instead through years of brick-by-brick nation building. That may not sound sexy, but it works. Indonesia has now peacefully cycled through several secular-minded leaders, and its civil society is flourishing. The country's problems are still immense: graft and poverty persist, as does sectarian conflict. But Egypt could do a lot worse than to follow the model of this moderate, Muslim-majority democracy

Here are some excerpts from an interesting Op Ed by Prof Lev Ginsburg on democracy in developing world, as published in Aljazeera English:

The basic reason for democracy's lack of solutions to such problems (poverty, economic disparity) is that its principles have been formulated in industrialised capitalist societies characterised by considerable cultural homogeneity and relatively small economic gaps.

Democracy is a set of formal principles developed in Western Europe with the aim of facilitating the representation and articulation of the middle and working classes and designed to contain peacefully the conflicts between them and the upper class.

In the absence of a balance of power between classes, and a consensual unifying national identity, the automatic installation of formal democratic principles might only make matters worse.----------When there is a systematic link between cultural identity and economic status, democracy becomes a problem, rather than a solution. It exacerbates cultural conflicts to the point of violence, because it provides a formal opportunity for the majority to force their will on the minority.

Political sociologist Michael Mann has shown that in these cases democracy only serves to intensify conflicts among racial and ethnic groups, to which I would add, in the Middle Eastern context, the conflict between confessional groups and between the religious and the secular.----------The oldest case, mind you, is the US - the cradle of the democratic constitution which announced a "government of the people" and began the massacre of the American indigenous people because they were not considered part of "we, the people" of America.--------Whoever wants democracy under these conditions must first come up with a creative and consensual formula, according to which each cultural group would be free to live its unique cultural life without attempting to force its identity and customs on the entire citizen body.

In other words, demonstrating for democracy is not enough. What the countries of the Middle East require is political consensus on mutual recognition of rights and coexistence, guaranteed by a constitution and institutionalised by electoral procedures and representative institutions.

Egypt does have to worry, however, about economic inequality and the severe daily hardships suffered by most of its population. Without providing solutions to these problems, even the most democratic regime can be toppled by massive protests, possibly leading to new forms of dictatorship. A good example of such a failure of democracy was December 2001 in Argentina, when the masses flooded the streets calling for "all politicians to go home" and toppling five presidents in a row.

This happened only two years after democratic elections swept a broad leftwing front to power, which had promised to bring the country out of its deep economic crisis, but failed. The elected government pursued the policy dictated by the International Monetary Fund (IMF), which protected the interests of foreign investors against those of the local middle and salaried class. The crisis caused all holders of local bank deposits to lose 70 per cent of their money, with the blessing of the IMF.

Therefore, Egypt must realise that although democracy is essential, any formal constitution or system of government will not solve its economic problems. Immediately after the elections, Egypt's new policymakers will have to switch from the formal liberal discourse of democracy to face and discuss the fundamental questions of Egypt's economic structure. In the process, they are liable to discover that it is far more difficult to uproot a corrupt economic regime than to topple a single dictator.

Here are some excerpts of an interesting open letter to the Arab pro-democracy protesters from an Indian writer Udayakumar:

1. ... ...there are hundreds of Members of Parliament (in both the upper and the lower house) such as Basudeb Acharia, Manikrao Hodlya Gavit, and Somnath Chatterji who are called "longest serving" members. I wonder if they should be called that or the "longest clinging" members. There is a similar trend in the legislative assemblies of all the states in India too. For instance, M. Karunanidhi, the present Chief Minister (US equivalent of State Governor) of Tamil Nadu state has been a member of the state house for more than 40 years now.

2. You rightly problematize the nepotism of your rulers and think that democracy could end all this. The dynasties of the Kennedys, the Bushs and the Clintons in the United States, and the Gandhi dynasty and quite a few smaller dynasties in India would prove that democracy and elections cannot curtail sycophancy, nepotism, and family succession....

3. ...In December 2008, while announcing federal corruption charges against Illinois Governor Rod Blagojevich, FBI Special Agent Robert Grant said that "if [Illinois] isn't the most corrupt state in the United States, it is one hell of a competitor." Blagojevich ended up in prison. Republican George Ryan is currently serving a 6 1/2-year term in federal prison for racketeering and fraud. Otto Kerner, a Democrat, was convicted in 1973 on 17 counts of bribery, conspiracy, perjury and other charges and sentenced to three years in the prison. In 1987 Dan Walker was convicted of bank fraud years after leaving office. Lennington Small, a Republican who served from 1921 to 1929, was indicted while in office for embezzlement. Most Indian politicians have no qualms about stealing public money and they are said to be the largest clientele of the Swiss banks. Rudolf Elmer, a Swiss bank executive, has said that "Switzerland is the most preferred tax haven for Indians" to stack up their illicit wealth (NDTV, January 19, 2011).

4. ...It is obvious that your leaders, kings and emirs use the national resources for their and their families' aggrandizement. Our democracies are not much different either. An article in opensecrets.org points out: “As Americans worry about their own finances, their elected representatives in Washington — with a collective net worth of $3.6 billion — are mostly in good shape to withstand a recession.” Before the meltdown rained on their parade, members of Congress, “saw their net worths soar 84 per cent from 2004 to 2006, on average.” The article points out that while US senators had “a median net worth of approximately $1.7 million in 2006,” only about “1 per cent of all American adults had a net worth greater than $1 million around the same time.” Reputed Indian journalist P. Sainath points out in his column in The Hindu newspaper (dated June 20, 2009) that the number of ‘crorepatis’ (millionnaires) in the present Indian parliament's lower house (Lok Sabha) is up 98 per cent as compared to 2004. Then there were 154 of them but now there are 306 — almost double. In both the United States and India, money from big corporations and business houses helps politicians secure election victories and eventually "own" them.

5...P. Sainath points out the firm links between wealth and winning elections in India in his above-mentioned article.... This is in a country that has 836 million people who scrape along with less than Rs. 20 (50 US cents) a day. Do you think the poor will ever have a chance of voicing their concerns in the policymaking circles?

Here's recent Businessweek report on corruption in Japanese construction industry:

The beneficiaries of all that (post WWII) spending were the so-called zenekon, large construction companies such as Kajima, Shimizu, Obayashi, and Taisei. The strength of the zenekon ensures that Japan is ready to rebuild quickly in the wake of its latest—and still unfolding—catastrophe, just as it did after the 1995 Kobe earthquake. But the sector, while a point of pride catered to by the nation's elected leaders and bureaucrats, isn't always a force for good. Proof lies all over Japan—in mammoth tunnels and bridges to nowhere, dams built against the advice of engineers, and seawalls raised over the objections of those they were purported to protect.

The ruling Democratic Party of Japan came to power in 2009 promising an end to wasteful public works projects and the cozy relationships between zenekon and politicians. The rebuilding of northeastern Japan following the Mar. 11 earthquake and the resulting tsunami and nuclear crisis will test that commitment. "They're going to have to contract out these projects in quick order, and that means companies with really tight ties to the contracting agency get the project," says Brian Woodall, a political scientist at Georgia Tech and author of Japan Under Construction. "It may be an opportunity for interested and powerful politicians to get involved, and that to me is not a good thing."-----The zenekon have traditionally been Japan's political kingmakers. From the 1970s until the 1990s, the companies donated generously to Liberal Democratic Party candidates, supporting the party's half-century reign. In a 1992 case that exposed the role the yakuza crime syndicates played in Japan's trucking and construction industries, testimony revealed that the nation's biggest firms had each donated some 20 million yen a year to a single LDP politician. In his book, Woodall describes a construction minister from the 1960s, Kono Ichiro, who would only meet with executives at his home after they paid a kutsunugidai ("shoe removal fee"), a zabutondai ("floor cushion fee"), and a nantokadai ("something-or-other fee"). In return, Japanese administrators and legislators steered public-works contracts to favored companies. And legislators did their best to grow the pot of money set aside for public works projects, especially in their home districts.

The result of all that cronyism and graft: projects like the Joetsu Shinkansen railway, a high-speed line built in the 1970s at the behest of former prime minister Kakuei Tanaka through one of the least populated areas in the country; the Isahaya Bay Project, a controversial series of dikes built by Kajima, Obayashi, and others, to turn a bay into farmland; and the Tokyo Aqua-Line, a nine-mile bridge-tunnel spanning Tokyo Bay, built at a cost of $12 billion by Kajima, and today only lightly used.

Prosecutors have periodically taken on the big firms, most recently in 2007, when the government won convictions against nearly all the zenekon—Obayashi CEO Takeo Obayashi, a descendant of the company's founder, resigned over the investigation, and the nation's farm minister, Toshikatsu Matsuoka, hanged himself. The Democratic Party of Japan's 2009 decision to freeze construction on an immense dam in Naganohara was seen as an attempt to follow through on its reformist campaign rhetoric.

The Arab world’s unrest has brought forth gushing, rather adolescent analysis about what the region will look like a year or more hence. Americans have decided that these upheavals have everything to do with the advent of liberalism, secularism, and Westernization in the region and that Islamist militant groups like al-Qaeda have been sidelined by the historically inevitable triumph of democracy—a belief that sounds a bit like the old Marxist-Leninist claptrap about iron laws of history and communism’s inexorable triumph.

How has this judgment been reached? Primarily by disregarding facts, logic, and history, and instead relying on (a) the thin veneer of young, educated, pro-democracy, and English-speaking Muslims who can be found on Facebook and Twitter and (b) the employees of the BBC, CNN, and most other media networks, who have suspended genuine journalism in favor of cheerleading for secularism and democracy on the basis of a non-representative sample of English-speaking street demonstrators and users of social-networking sites. The West’s assessment of Arab unrest so far has been—to paraphrase Sam Spade’s comment about the Maltese Falcon—the stuff that dreams, not reality, are made of.

A year from now, we will find that most Arab Muslims have neither embraced nor installed what they have long regarded as an irreligious and even pagan ideology—secular democracy. They will have instead adhered even more closely to the faith that has graced, ordered, and regulated their lives for more than 1400 years, and which helped them endure the oppressive rule of Western-supported tyrants and kleptocrats.

This does not mean that fanatically religious regimes will dominate the region, but a seven-year Gallup survey of the Muslim world published in 2007 shows that a greater degree of Sharia law in governance is favored by young and old, moderates and militants, men and even women in most Muslim countries. While a façade of democracy may well appear in new regimes in places like Egypt and Tunisia, their governments will be heavily influenced by the military and by Islamist organizations like the Muslim Brotherhood and al-Qaeda. If for no other reason, the Islamist groups will have a powerful pull because they have strong organizational capabilities; wide allegiance among the highly educated in the military, hard sciences, engineering, religious faculties, and medicine; and a reservoir of patience for a two-steps-forward, one-step-back strategy that is beyond Western comprehension. We in the West too often forget, for example, that the Muslim Brotherhood and al-Qaeda draw from Muslim society’s best and brightest, not its dregs; that al-Qaeda has been waging its struggle for 25 years, the Muslim Brotherhood for nearly 85 years; and that Islam has been in the process of globalizing since the 7th century.

As new Arab regimes develop, Westerners also are likely to find that their own deep sense of superiority over devout Muslims—which is especially strong among the secular left, Christian evangelicals, and neoconservatives—is unwarranted. The nearly universal assumption in the West is that Islamic governance could not possibly satisfy the aspirations of Muslims for greater freedom and increased economic opportunity—this even though Iran has a more representative political system than that of any state in the region presided over by a Western-backed dictator. No regime run by the Muslim Brotherhood would look like Canada, but it would be significantly less oppressive than those run by the al-Sauds and Mubarak. This is not to say it would be similar to or more friendly toward the West—neither will be the case—but in terms of respecting and addressing basic human concerns they will be less monstrous.

Talking about democracy, here are some excerpts from a Vanity Fair article by Nobel Laureate Economist Joe Stiglitz about growing concentration of wealth and power in America. It's titled "Of the 1%, For the 1%, By the 1%":

Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequal ities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.

Indian Chief Justice Kapadia warns jusges not to exceed powers granted by the Indian constitution, reports NewsOne:

New Delhi, April 16 (IANS) The judiciary should not try to act as a super legislature, Chief Justice of India S.H. Kapadia said Saturday. He also asked the political leadership to resist from giving protection to corrupt judges.

Cautioning against internal interference from high-ranking judges which, if resisted, could lead to lower-ranking judges being transferred or being denied promotions, he said ‘similarly political protection should not be given to corrupt judges’.

The chief justice said judges should resist the temptation of post-retirement assignments. ‘A judge must not accept patronage through which he acquires office, preferential treatment or pre-retirement assignments. These can give rise to corruption.’

He advised judges to impose upon themselves certain ‘restrictions’ and remain ‘a little aloof and isolated’ from people in order to erase the suspicion that they were susceptible to undue influence in the discharge of duties.

He told judges to eschew contact with lawyers, individuals or political parties, their leaders or ministers unless it was on purely social occasions. A judge’s obligation must start and end with his analysis of law, not just personal beliefs or preferences.

He asked the courts to desist from the tendency of substituting decisions of legislative bodies with their own socio-economic beliefs.

‘We must refuse to sit as super legislatures to weigh the wisdom of the legislation,’ Chief Justice Kapadia said, delivering the fifth M.C. Setalvad Memorial Lecture on the ‘Canons of Judicial Ethics’ here.

‘In many PILs (public interest litigations), the courts freely decree rule of conduct for the government and public authorities which are akin to legislation. Such exercises have little judicial function in them,’ the chief justice said.

Disagreeing with the rationale that the judiciary was encroaching upon the legislative domain because the executive (government) had failed to discharge its responsibilities, Justice Kapadia said that ‘the courts should be circumspect in understanding the thin line between law and governance’.

The chief justice said a balance had to be struck between judicial independence and the accountability of judges. He said the challenge before the judiciary was how to respond to unreasonable criticism of courts.

The chief justice said that there was a need for striking a right balance between the judicial accountability and principle of judicial independence.

He said the challenge was ‘how does one achieve the right balance between autonomy in decision making and independence from external forces on the one hand and accountability to the community on the other hand?’

The habit of thinking impersonally, without regard for the worldly advantages or disadvantages of an opinion or an action was ethical thinking, he said.

‘This is the prerequisite of judicial thinking. The man who is only interested in himself is not admissible (to ethical thinking),’ said the chief justice.

The chief justice in his lecture dealt with a wide range of subjects relating to Canons of Judicial Ethics that included subject like Judicial ethics: From just words to deeds, Structuring of judgments, Accountability and judicial independence in the context of judicial activism and Value-based judicial accountability and independence.

The lecture was organised by the Bar Association of India in the memory of Setalvad, who was the first attorney general of India.

Delhi High Court Chief Justice Dipak Misra earlier said that the canons of judicial ethics should include both the judges and the advocates. He said that there should be strict adherence to integrity both in public and private life.

ISLAMABAD — Pakistan is defying mounting Western pressure to end a giant tax dodge with fewer and fewer people contributing to government coffers, spelling dire consequences for a sagging economy.

Tax is taboo in Pakistan. Barely one percent of the population pays at all, as a corrupt bureaucracy safeguards entrenched interests and guards private wealth, but starves energy, health and education of desperately needed funds.

Less than 10 percent of GDP comes from tax revenue -- one of the lowest global rates and worse than in much of Africa, say economists.

Federal Board of Revenue (FBR) spokesman Asrar Rauf said 1.9 million people paid tax in 2010, less than the year before, despite 3.2 million being registered to pay -- itself a drop in the ocean of a population of 180 million.

As a result, Pakistan's fiscal deficit widened from 5.3 percent to 6.3 percent of GDP in 2010, the Asian Development Bank said this month, knocking 2011 growth figures to 2.5 percent and predictions for 2012 to 3.2 percent.---------This month visiting British Prime Minister David Cameron pressed the point home, saying aid increases were a hard sell when: "Too many of your richest people are getting away without paying much tax at all and that's not fair".---------The IMF last May halted a $11.3 billion assistance package over a lack of progress on reforms, principally on tax.

And despite a flurry of meetings, no new loan has been agreed in the run-up to the IMF and World Bank's Spring meetings.

An IMF review mission is due to visit on May 8. "Consensus is building, we have almost reached agreement (on reform)," one government official told AFP, but gave no details.----------What would really work, say analysts, would be scrapping exemptions that serve entrenched interests, such as a 50 percent tax discount on sugar and a gate on taxing agricultural income that largely exempts wealthy feudal landowners.

But stalemate and vested interests have made that impossible.

"There's talk of early elections. One has a brittle coalition. A lot of the reform areas that need to be dealt with have very well entrenched and powerful lobbies that are making the case against it," said a finance ministry official.

As it is, the tiny minority who contribute say they carry a disproportionate tax burden, for which they get nothing in return.

Pakistan suffers from an awful energy crisis, yet government spending on electricity subsidies last year reached just under one percent of GDP, health spending 0.5 percent and education two percent, said the finance ministry.

According to a 2009 study by the Pakistan Institute of Legislative Development and Transparency, the average member of parliament was worth $900,000 and the wealthiest $37 million.

Those figures stand against estimates that a quarter of the population lives below the poverty line and that GDP per capita stands at $2,400.

"No one trusts the government," says industrialist Mohammad Ishaq, former vice president of the chamber of commerce in the northwestern province of Khyber Pakhtunkhwa.

"Without social welfare and with this corruption, nobody is ready to pay tax... in return one gets nothing -- no health, education, social security."

Eunuchs have been appointed tax collectors in Karachi, the financial capital, on the understanding that a visit from the maligned transgender group would embarrass people into paying up.

But former finance minister Salman Shah said tax evasion was inevitable because of corruption within the FBR, which employs 23,000 people nationwide.

"There's a big mistrust of the tax authority itself. That's why a self-assessment scheme came in," said Shah..............

As Pakistani Army comes under unprecedented sharp criticism by the politicians, the public and the media, here's an excerpts from an interesting piece by Vir Sanghvi on how the Indians treat Indian Army:

Equally, we will never blame the Army for anything. In 1962, we were thrashed by the Chinese but the consensus was that politicians had lost the war while our brave soldiers had done their best. The 1965 war was at best a stalemate (the Pakistanis also claimed they had won) but we treated it as a glorious victory for the Indian Army. Operation Blue Star was a fiasco. But even today, it is Blue Star we remember favourably rather than Black Thunder (conducted by the paramilitary forces to clean up the mess left behind by Blue Star), a bona fide success.

By and large, the social contract has worked. The Army has nearly always got us out of jams when we need its services. Whether it was Delhi in 1984, Bombay in 1993, or Gujarat in 2002, we needed the Army to restore order. And during the Kargil War, young officers led from the front, sacrificed their lives and displayed astonishing bravery in the service of their country.

Consequently, the army sometimes appears to live in a state within a state. Visit a cantonment and you will be struck by the contrast with the civilian part of the town or city where it is located. The roads will be broad and well-maintained, the buildings will be freshly painted, the surroundings will be clean, and an air of good manners and civility will prevail. Visit an army town (Wellington, for instance) and the contrast will be even more striking. The order and cleanliness of the cantonments serves as a contrast to the chaos and filth of modern India.

There is, however, one important aspect of the social contract that now seems to be failing. As corruption has spread in modern India, we have reluctantly accepted that most parts of our society are tainted – civil servants, the schools and even the lower judiciary. But somehow, we have always believed that the army is different.

Oh yes, we hear the stories. We hear about Generals who take kickbacks on arms deals and about officers involved in canteen purchase scandals. But because this corruption appears to be restricted to the Army itself and because we believe that it is not widespread, we are happy to look the other way.

The problem with the Adarsh scandal and the controversies over other land deals that have erupted recently is that they encroach into the civilian space. Senior army officers are seen to be conniving with politicians, bureaucrats and contractors to make millions.

Worse still, at least in the case of the Adarsh scandal, there is a cynical abuse of the social contract. When we say that we will respect and pamper the army, we do not expect senior officers to grab flats for themselves in the name of Kargil martyrs.

Earlier this week, the Army chief spoke about his resolve to cleanse his force. I am not sure he fully grasps how serious the situation is. The problem is not just that there are ‘a few bad apples’ in the army. It is that Army corruption has now spilled out into the civilian space and that Generals are making big bucks by exploiting the regard we have for the heroism of the Army and the sacrifices made by its soldiers.

If more such instances come to light, then the press will begin looking critically at the Army. The politicians will have an excuse to delve deep into the workings of the officer corps. This will give them the opportunity they need to play favourites. And the public, regretfully recognising that the Army has breached the social contract itself, will reluctantly acquiesce in the muck-raking by the press and the interference by politicians.

Once this happens, the social contract will not survive. The image of the Army will not recover. And the perfect balance we have built between the Army and the Indian people will topple over..

Here's an AFP report about Indian military owning land and running golf courses:

NEW DELHI — The Indian army has developed a sideline in running golf courses using government land but returning no revenue to the state, the nation's auditor claims in a damning new report.

The Comptroller and Auditor General (CAG) found that at least 32 square kilometres (12 square miles) of rent-free land had been handed to a privately-run company, Army Zone Golf, which operates 97 luxury golf courses.

The defence ministry is the largest state landowner, holding 80 percent of the 7,000 square kilometres of government land, much of it now prime real estate, according to the CAG report released Friday.

Golf memberships are being sold to present and past service personnel as well as civilians and foreign nationals, the report said, with revenue credited to a private regimental fund which could not be accessed by the auditors.

Army authorities "earn large amounts of revenue by allowing persons other than service personnel to use these facilities," the report said.

"Heavy amounts of revenues were being earned without paying any lease rent and allied charges for use of government assets," it added.

The CAG's account of the misuse of public land will add to growing worries about the military's slide into corruption following a string of recent scandals.

In January, the government ordered a 31-storey apartment block in Mumbai to be demolished after it emerged army officers and local politicians had usurped apartments originally meant for war widows.

Army Zone Golf claims to promote the sport in the armed services and runs "some of the most spectacular golf courses of India," according to its website. No one at the company responded to calls for comment from AFP.

The company's organising council includes several retired army officers, and was once headed by Joginder Jaswant Singh, former army chief of staff and now the governor of the northeastern state of Arunachal Pradesh.

The CAG has been instrumental in exposing mismanagement and possible fraud in the sale of telecom licences in 2008 which it said had led to a loss to the state of up to 39 billion dollars.

The telecom minister at the time, A. Raja, has since been arrested and awaits trial.

Gurgaon, located about 15 miles south of the national capital, New Delhi, would seem to have everything, except consider what it does not have: a functioning citywide sewer or drainage system; reliable electricity or water; and public sidewalks, adequate parking, decent roads or any citywide system of public transportation. Garbage is still regularly tossed in empty lots by the side of the road.

With its shiny buildings and galloping economy, Gurgaon is often portrayed as a symbol of a rising “new” India, yet it also represents a riddle at the heart of India’s rapid growth: how can a new city become an international economic engine without basic public services? How can a huge country flirt with double-digit growth despite widespread corruption, inefficiency and governmental dysfunction?

In Gurgaon and elsewhere in India, the answer is that growth usually occurs despite the government rather than because of it. India and China are often considered to be the world’s rising economic powers, yet if China’s growth has been led by the state, India’s growth is often impeded by the state. China’s authoritarian leaders have built world-class infrastructure; India’s infrastructure and bureaucracy are both considered woefully outdated.

Yet over the past decade, India has emerged as one of the world’s most important new engines of growth, despite itself. Even now, with its economy feeling the pressure from global inflation and higher interest rates, some economists predict that India will become the world’s third largest economy within 15 years and could much sooner supplant China as the fastest-growing major economy.

Moreover, India’s unorthodox path illustrates, on a grand scale, the struggles of many smaller developing countries to deliver growth despite weak, ineffective governments. Many have tried to emulate China’s top-down economic model, but most are stuck with the Indian reality. In India, Gurgaon epitomizes that reality, managing to be both a complete mess and an economic powerhouse, a microcosm of Indian dynamism and dysfunction.

In Gurgaon, economic growth is often the product of a private sector improvising to overcome the inadequacies of the government.

To compensate for electricity blackouts, Gurgaon’s companies and real estate developers operate massive diesel generators capable of powering small towns. No water? Drill private borewells. No public transportation? Companies employ hundreds of private buses and taxis. Worried about crime? Gurgaon has almost four times as many private security guards as police officers.

“You could call it the United States of Gurgaon,” said Sanjay Kaul, an activist critical of the city’s lack of planning who argues that Gurgaon is a patchwork of private islands more than an interconnected city. “You are on your own.”

Gurgaon is an extreme example, but it is not an exception. In Bangalore, outsourcing companies like Infosys and Wipro transport workers with fleets of buses and use their own power generators to compensate for the weak local infrastructure. Many apartment buildings in Mumbai, the nation’s financial hub, rely on private water tankers. And more than half of urban Indian families pay to send their children to private schools rather than the free government schools, where teachers often do not show up for work.

However incompetent the military may appear after Abbottabad and PNS Mehran, it is far more competent that the corrupt and incompetent political class in South Asia.

One need only look at the differences between Cantonments and civilian communities in India or Pakistan to get a sense of who provides more competent governance.

Here's an excerpt from a piece by Indian journalist Vir Sanghvi describing Indian military:

".... the army sometimes appears to live in a state within a state. Visit a cantonment and you will be struck by the contrast with the civilian part of the town or city where it is located. The roads will be broad and well-maintained, the buildings will be freshly painted, the surroundings will be clean, and an air of good manners and civility will prevail. Visit an army town (Wellington, for instance) and the contrast will be even more striking. The order and cleanliness of the cantonments serves as a contrast to the chaos and filth of modern India."

http://virsanghvi.com/CounterPoint-ArticleDetail.aspx?ID=569

Similarly, Prof Anatol Lieven in his book "Pakistan: A Hard Country", describes Pak Army as follows:

"For the military, the image of paradise is the cantonment, with its clean, swept, neatly signposted streets dotted with antique, gleaming artillery pieces, and shaded trees....In the poorer parts of Pakistan, the contrast with civilian institutions-including those of government-is that between developed and the barely developed worlds....In the military headquarters, every staff officer has a computer. In the government offices, most ministers do not (and in many cases would not know how to use it if they did). "

This represents a shocking surrender on my part to SMS-speak, which comes of associating with students!

What it stands for is “Patronage to Kinship,” which is central to the nature and workings of the Pakistani state and political systems. In my book, I argue that this system—especially in the countryside but to some extent also in the cities—revolves around local elites using their own wealth to gain leadership positions in their kinship groups, using these positions to advance in politics and get elected to the provincial or national assembly (whether under civilian or military rule), and then in turn using their influence on government to extract corruption.

However, by contrast with some systems, like Nigeria’s, the benefits of this corruption cannot simply or even mainly be kept for the immediate beneficiaries. In order to retain support, they have to distribute a reasonable proportion of it to their kinfolk and other supporters—otherwise they won’t go on supporting the leaders for very long. Even within quite tight-knit kinship groups, there is usually a rival relative who will step forward to claim the leadership if the existing leader is seen as mean, greedy, and unresponsive to his followers’ needs. There are two good U.S. quotes which illustrate the morality behind this. The first was said about Mayor Richard M. Daley of Chicago by his supporters: “He dunks, but he splashes.” The second comes from Bruce Springsteen’s song “Highway Patrolman”: “A man turns his back on his family, he ain’t no friend of mine.”

In my book, I describe this system as “Janus-faced.” On the one hand, because of the way in which it maintains kinship links and spreads a certain amount of patronage through society, it helps maintain the existing system’s resilience in the face of the threat of Islamist revolution. On the other hand, it cripples the state’s ability to generate and spend resources effectively on infrastructure, education, and every other form of state service, and it is therefore disastrous for Pakistan’s economic development and social progress.

I argue that the power and prestige of the Pakistani military within the Pakistani system has been due chiefly to its ability to separate itself from the normal workings of the patronage and kinship system, and to operate as a relatively efficient and honest meritocracy. However—and I do wish more of my critics would notice this—I also say repeatedly that the reason the military has been able to do this is that it has in effect functioned as a giant patronage network, extracting a massive share of state resources and spending them on itself, albeit in an orderly way and with some benefits reaching the ordinary soldiers as well as the officers.

Yet another debacle has occurred on the economic front, with the government failing to float its exchangeable bond in the international debt-capital market. In an act of desperation, the Pakistani economic manager had decided to launch a $500-million exchangeable bond with 10 percent shares of Oil and Gas Development Corporation (OGDC) attached to this transaction, the proceeds of which were to come by the end of the current fiscal year. It was the intention of the government to use these proceeds for retiring its State Bank debt and reducing its budget deficit to that extent.

The Pakistani team was informed by the global investors during the road show that they had little appetite for Pakistani paper at the moment, particularly in the presence of the Greek debt crisis and the unresolved issue of increase in the debt limit of the US administration. The Pakistani team did not pitch for the bond and returned empty-handed.

Why did Pakistan have to abandon its transaction? Are the economic managers aware of the consequences of such a colossal failure for the country? One thing is clear from the perspective of the economic managers: who cares about the country? They are there to improve their resumes.

What is an exchangeable bond? The country issues a normal sovereign bond with an option that the bondholder can convert the bond into common shares. The transaction under discussion provided an option to bondholders to convert their bonds into OGDC shares. The advantageous thing about such a bond is that it has the option for conversion of debt into portfolio investment.

There are many reasons for the failure of this transaction. Firstly, the timing for floating the bond was highly inappropriate. This is summertime, when investors close their books and go for vacations. Secondly, the international economic environment, particularly the persistence of the Greek debt crisis and the emergence of issue pertaining to enhancing the debt limit of the US administration have created severe uncertainty in the international debt-capital market.

Thirdly, Pakistan’s own economic fundamentals are weak. Why would anyone invest in a country’s paper whose debt is rising, budget deficit is averaging over six percent of the GDP, high double-digit inflation continuous persists for the last 45 months, and growth is slowing to an average of 2.6 percent per annum over the last four years. Fourthly, Pakistan’s relations with the IMF and other development financial institutions (DFIs) are not smooth. Fifthly, Pakistan’s relations with the United States are also on a bumpy ride. For an emerging market country, its relationships with the US, the IMF and the DFIs are critical in attracting global investors to invest in its paper.

Sixthly, Pakistan’s domestic political and security environment are not conducive to attract global investors to invest in Pakistani paper. Seventhly, the Pakistani team involved in this transaction, barring one member, was quite immature and had no idea whatsoever about the transaction. All these factors have contributed to the failure of the transaction, damaging the reputation of the country and OGDC. In order to save face, the economic team could call this transaction “non-deal road show.” But the international capital market participants are not novices. Word has already travelled across the globe that Pakistan has failed to find takers for its paper.----It is in this perspective that Pakistan floated its paper from February 2004 to May 2007. Each time the Pakistani paper was oversubscribed substantially. Pakistan emerged as one of the few countries which successfully floated a 30-year bond. This simply reflected the confidence of global investors in Pakistan’s economic management....

The failure of the recent bond offering is a serious setback that proves yet again the utter incompetence of the economic team and lack of international investor confidence in the current PPP govt.

It stands in sharp contrast to Pakistan's multiple successful bond offerings from February 2004 to May 2007. Each time the Pakistani paper was oversubscribed substantially. Pakistan emerged as one of the few countries which successfully floated a 30-year bond. This simply reflected the confidence of global investors in Pakistan’s leadership under President Musharraf.

It is 1838, and Amitav Ghosh's new novel, River Of Smoke, sails into Canton, a rambunctious, crowded city, and home to seafarers, itinerant merchants, opium traders and many such floating folks. "In China, everything new comes from Canton," says a character, in what is the second book in a planned trilogy.----Canton's suburbs are bustling, floating cities on the Pearl River, a veritable "waterborne hive" where up to a million people live in boats moored along the water's edge. At the centre of this maelstrom of commerce, a prosperous Indian Parsi opium merchant, Bahram Modi, negotiates a knotty question of the morality of his trade even as Chinese authorities launch a concerted crackdown.

But beyond the fog of opium and the cacophony of the foreigner's town, River of Smoke is really a scathing parable of globalisation.---Last week, on a cloudy Delhi morning, I asked Ghosh, a trained anthropologist from Oxford, whether free trade and globalisation had failed a lot of people. "Of course," he said. "Look around you, look at Greece, look at England. And yes, we keep making and selling things which are of no real use!"

There's an amazing amount of economics in his novel - pushed against the wall, opium merchants talk about setting up an off-share trading base to ship in opium and about the "hand of freedom, of the market", echoing Adam Smith. (Ghosh tells me that a number of traders were Scottish, and would have been influenced by Smith's tracts.) Clearly, globalisation repeats itself again and again - often with unsavoury results - and nothing really changes.

And then there are the ruminations on democracy. "Democracy is a wonderful thing," says Bahram. "It is a marvellous tamasha (spectacle) that keeps common people busy that men like ourselves can take care of all matters of importance. I hope one day India will also be able to enjoy these advantages." I ask Ghosh about the health of democracy in India. He doesn't appear to be very upbeat about it. "Democracy for democracy's sake doesn't make much sense", he says, "unless we strengthen institutions and follow processes." Otherwise, as Bahram says, it can just become a spectacle, involving the institutions, the media and the people.

Two decades after India embraced globalisation and economic reforms, the results are mixed: a rising tide has lifted all boats - to borrow an allegory from Ghosh's sea novels - but many boats are barely afloat. There is valid criticism about a lot of growth being jobless, and inadequate state attention to education and health of the poor. In an intensely media-driven environment, where everybody appears to be playing to the gallery, democracy, many say, is being trivialised.

But, of course, River Of Smoke is more than all this. This masterwork of historical fiction is brimming with characters and colour. Behind its finely etched detail about people, cities, voyages, flowers and food, it is a seriously engaging political novel - perhaps one of the finest ever by an Indian writer. Don't miss it.

KARACHI - Shahid Kardar's resignation as governor of the State Bank of Pakistan this week after less than a year in the job sends out another deeply negative signal on the country's economic management and further erodes belief in Islamabad's commitment to fiscal reforms demanded by the International Monetary Fund (IMF).

Finance Minister Abdul Hafeez Shaikh is making last-ditch efforts to persuade Kardar to withdraw his resignation, which he submitted mid-week before leaving Islamabad for Lahore. Kardar returned to the capital on Thursday at Shaikh's request to iron out their differences, Dawn reported on Friday, citing an unnamed source.

Kardar was appointed central bank governor last September and is the second in succession to leave the post before completion of the three-year statutory term. His predecessor, Salim Raza, quit for personal reasons in June 2010, although commentators at the time said his resignation was a response to efforts to curtail the central bank's independence. Kardar will remain central bank governor until his resignation is officially accepted, the Wall Street Journal reported.

Critics say the two resignations in quick succession, and Shaukat Tarin's resignation as finance minister in February last year, reflect a failure by the government to take management of the economy seriously. The Pakistan People's Party (PPP)-led government has gone through four finance ministers, five finance secretaries, four deputy chairmen of the Planning Commission and now possibly three central bank governors since it came to power in September 2008.

Concern that Kardar's departure will add to confusion among international organizations such as the IMF as to who has authority to deal with issues that include increasing tax revenues and cutting the government's heavy dependence on loans was downplayed by Sakib Sherani, a former economic adviser to the Finance Ministry.

"The IMF deals with institutions and not individuals so it's likely the acting governor will attend IMF meetings," he said, according to a Reuters report. "What's critical for the markets is who his successor is and why he resigned."

Such pre-term departures from the central bank "serve as a jolt to the banking and finance industry in the country, as the entire industry adopts a 'wait-and-see' strategy", The News reported economist Ashfaque Hassan Khanas as saying.

Kardar resigned amid reports suggesting he had developed serious differences with top state functionaries, according to The Express Tribune. Kardar is reputed to have given the government a hard time at cabinet and economic coordination committee meetings.

Even so, his critics claim he has been unable to exert the central bank's independence. His inability to have a bank amendment act passed in its original shape meant the government approved a "toothless" act, maintaining the Finance Ministry's hold over the central bank.

Pakistani officials, including the central bank governor, are due to meet with an IMF team later this month. Kardar has been supporting fiscal reforms demanded by the IMF, urging a broadening of the tax base and gradual elimination of untargeted subsidies.

He recently called for better debt management by the government to contain the fiscal deficit. The IMF since August 2010 has suspended a US$11.3 billion loan program, initially agreed late in 2008, as Islamabad drags its feet on introducing tax reforms, raising power tariffs and cutting subsidies.

Here are some interesting excerpts from an Outlook India interview with Prof Aswath Damodaran of NYU Stern School of Business:

What risks do the present crisis hold for developing economies like India, grappling for well over a year to curb inflation?

If you are a developing economy you are like a growth company, which is far more dependent on the economy because everything gets magnified. Developing countries are far more exposed to global real economic growth because so much of the value comes from future growth. It is like a mature company is less affected by a recession than a growth company; mature economies are less affected than developing economies by a slowing global economy. Everybody gets hurt, but developing economies in a strange way can get hurt more because everything gets magnified at their level.

So, is India’s current pace of economic growth sustainable?

A scaling effect is going to kick in. It is one thing to grow at 9 per cent a year when you are a smaller economy, but as you get larger people have to get realistic. Policymakers have to realise that planning for 6 per cent real growth for the next 10 years is absurd. As the country scales up, you have got to get more realistic about real growth and have policies in place for what to do as real growth slows down, because it will. It will in India and it will in China. It has got nothing to do with the quality of the policies, it is a fact that as the economy becomes larger maintaining those growth rates is going to be unrealistic.

As we speak, corruption has become a major cause for protests in India....

The way I think about corruption is that it is like paying an unofficial tax. What corruption has done is it has raised the effective tax rate for businesses operating in India from 33.99 per cent to 41, 42, 43 per cent and that lowers investment. It lowers real growth. It has always been a deterrent and it will continue to be so. I think it is important that corruption be dealt with, but you can’t deal with it with an ombudsman, or a group that gets together and says let’s catch corrupt politicians, because it is entrenched in the system. It is built into the system because the salaries of many public servants are set with the implicit assumption that they can supplement that salary by getting paid on the side. It’s almost like waiters in the US get paid a low minimum wage because the assumption is that people will tip them 15 per cent so they can make up that money. It is not going to be easy to take out of the system because you have to revisit the way in which public servants get salaries.

A vigorous difference of opinion among technocrats, economists and corporate leaders on a number of socio-economic issues was witnessed during an interactive session held at the Institute of Business Administration (IBA) on Saturday. And at the end it was unclear whether democracy was the answer, or a dictatorship, as advocates for both arguments came up with pretty convincing logic.

Speaking at the session organised by IBA in collaboration with Blinck, a youth resource group, under the title of “New Year Resolutions for the Economy of Pakistan,” panellists candidly expressed disagreements over the questions of foreign aid, democracy and the interplay of policy-making and implementation at the national level.

“Many people think that a non-democratic set-up is a panacea for the economic problems of Pakistan. They’re wrong. A non-democratic government is not sustainable,” said Ishrat Husain, former governor of the State Bank of Pakistan, who is currently serving as dean and director of IBA. “Democracy is slow and messy. It takes two steps forward and four steps backwards. Yet it’s the only option. The democratic process shouldn’t be interrupted.”

Husain said military regimes do make an extra effort in the beginning to improve the economy because they have not yet developed a constituency of their own. “But later on, they start making compromises.”

Claiming that a democracy needs low poverty and high literacy rates to prosper, Gillette Pakistan CEO Saad Amanullah Khan said Pakistan had only two eras of development: first, in the early 1960s, and second, during the first three years of the Musharraf government. “I don’t care if a dictator is there as long as he revamps the economy,” Khan said.

He said that the idea of a government led by technocrats that could bring the economy back on its feet had its relative merits. Khan emphasised the need for adopting a national vision for long-term growth, adding that the entire nation should work towards its realisation. “Go to Proctor & Gamble or Gillette, and they’ll tell you their five-year goals in detail. But ask a government representative what the vision for Pakistan is for the next five years, you won’t get any definite answer.”

Disagreeing with Khan, Husain said Pakistan did not need any more “visions,” as the problem existed in their implementation only. “The country is full of pious documents. These are beautifully written policy papers that nobody reads. We all agree on the substance of policy, but the implementation is the real issue.”

Responding to a question, former Asia editor for The Economist Simon Long said it was wrong to attribute Pakistan’s dismal economic performance of six decades to its culture or laid-back attitude to work. He said that 35 years ago people often assumed China’s poor economy was a consequence of Confucianism. He said it was now obvious that Confucianism had nothing to do with the slow growth in the economy of China.

Talking about Pakistan’s economic indicators, Long said an economy with a tax-to-GDP ratio of less than 9% was not sustainable. He said it was hard for him to understand how Pakistan’s economic managers would bring down the fiscal deficit in next two to three years.

In response to the comment of a business student that Pakistan should stay away from all kinds of foreign aid and assistance to achieve self-reliance, Husain said the assumption that the Pakistani economy depended on US aid to survive was wrong. “Isolationism won’t solve our problems. Transfer of knowledge and technology is important. You’ve to be outward-oriented.”

ISLAMABAD: Planning Commission of Pakistan with the support of Department for International Development (DFID) and assisted by Governance Institutes Network International (GINI) has initiated the process of consultative workshops in all provincial headquarters and major business hubs to involve stakeholders for economic literacy and local ownership to facilitate the implementation of framework for economic growth of Pakistan - a strategy that seeks accelerated and sustained growth and development formulated by the Planning Commission.

Planning Commission of Pakistan has developed a framework for Economic Growth of Pakistan, which has been approved by National Economic Council (NEC).

Framework for economic growth is informed by the latest in economic thinking and seeks to strengthen both government and markets. It is not a ‘government versus markets’ approach but a ‘government and markets’ approach. An efficient government underpins a vibrant market. Much of the proposed reforms are to get the role of government and market in balance to develop efficiency within and between the two. At the first stage, efforts will be undertaken to revive the economy to its short-term potential GDP growth rate of about 5-6% a year. If issues regarding energy governance are resolved and some credible macro stability is reached, this could be achieved in a short time.

The strategy also suggests deep and sustained reforms - in areas such as public sector management, developing competitive markets, urban management and connecting people and places - as a way forward for accelerating growth to above 7%. The major themes of the Framework for Economics Growth are vibrant and competitive markets, governance, urban development, youth and community and energy.

Six critical changes have been identified that need to be introduced to strengthen the linkage between the Planning Commission and government performance. These changes are: strengthen the Medium-Term Development Framework (MTDF) and the Medium-Term Expenditure Framework (MTEF) for setting medium-term priorities in line with growth strategy and reforms agenda, support a unified result-based budget preparation process, decentralise responsibility for projects to line ministries, redefine the Planning Commission’s role and processes in respect of major capital projects and establish a results-based monitoring and evaluation system.

Planning Commission should lead the reform and change process through identification and advocacy of critically required amendments in policies. The commission has urged all stakeholders to own the policy and become agent of change, as until and unless they put force behind this growth framework, it may not be implemented in its true spirit.

Agriculture represents the backbone of our economy. It can serve as a launching pad for transition to a knowledge economy, as it has a huge potential for revenue generation. But that can happen only if agricultural practices are carried out on scientific lines and use of technology maximised. The four major crops of Pakistan are wheat, rice, cotton and sugarcane. They contribute about 37 percent of the total agricultural income and about nine percent to the GDP of Pakistan.-----------Wheat is the most important crop of Pakistan, with the largest acreage. It contributes about three percent to the GDP. The national average yield is about 2.7 tons per hectare, whereas in Egypt the yields are 6.44 tons per hectare and in European countries such as France, Germany and the United Kingdom they are above seven tons per hectare. We presently produce about Rs220 billion worth of wheat. If we can boost our yields to match those of Egypt, it can generate another Rs350 billion, allowing us to systematically pay off the national debt and make available funding for health and education.

However, the government has been reluctant to invest in research, water reservoirs and dams and extension services so that the country continues to suffer. Some progressive farmers in irrigated areas have been able to obtain yields of 6-8 tons per hectare but they are very much a minority. In rain-fed areas the yields are normally between 0.5 tons to 1.3 tons per hectare, depending on the region and amount of rainfall. In irrigated areas the yields are normally higher, in the range of 2.5 tons to 3.0 tons per hectare. Improved semi-dwarf cultivars that are available in Pakistan can afford a yield of wheat between 6-8 tons per hectare. It is possible to increase the yields substantially with better extension services, judicious use of fertilisers and pesticides, and greater access of water from storage reservoirs and dams that need to be constructed.

Cotton represents an important fibre crop of Pakistan that generates about Rs250 billion to the national economy, and contributing about two percent to the national GDP. Pakistan is the fourth-largest producer of cotton in the world, but it is ranked at 10th in the world in terms of yields. The use of plant biotechnology can help to develop better cotton varieties. Bt cotton produces a pesticide internally and safeguards the plant against chewing insects. The yields of Pakistani seed cotton and cotton fibre are both about half those of China. A doubling of cotton yields is doable and it can add another Rs250 billion to the national economy.

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The failed system of democracy in Pakistan is strongly supported by Western governments. It serves Western interests as it leads to docile and submissive leaders who serve their foreign masters loyally. The stranglehold of the feudal system thrives with no priority given to education. More than parliamentarians have forged degrees and the degrees of another 250 are suspect. The Supreme Court decision of verification of their degrees is flouted and ignored by the Election Commission. The bigger the crook, the more respect he is given by the government and the biggest crooks are conferred the highest civil awards. The economy has nosedived and we are today ranked among the bottom six countries of the world in terms of our expenditure on education.

Transparency International Pakistan says military least corrupt, according to The Nation newspaper:

Judiciary has stepped up into the 4th position from 6th in the previous year in terms of corruption, while land administration department has got the first position on the list of country’s most corrupt institutions, according to the National Corruption Perception Survey 2011, released by the Transparency International Pakistan (TIP) on Wednesday.

According to the report the police department has taken the second spot while the Power sector has dropped to the 5th rank from 2nd. Taxation slipped to the 3rd rank from its previous 8th position, while Customs and Tendering and Contracting departments have shown alarming increase in the corruption trend.

It is pertinent to mention here that for the first time military has been included in the survey and it was the least corrupt department after education in the year 2011. Police had topped all the previous years’ surveys but the Land Administration has crossed them and the factor of the ‘Land Mafia’ was one of the big reasons for this increase.

The annual survey report was released at Karachi Press Club in a press conference by TIP Chairman Sohail Muzaffar, along with TIP Advisory Committee chairman Syed Adil Gilani. This year’s survey has been conducted by Gallup Pakistan. Sohail Muzaffar cited the delay in punitive action by the state organs against the corrupt elements in corruption cases like Pakistan Steel, NICL, Punjab Bank, Rental Power Plants, KESC, PIA, Railway and Wapda as the main reason for the rise in corruption levels.

Sohail informed that judiciary is confronted by deliberate defiance in implementing Supreme Court orders and delay in punishing corrupt persons by the judiciary is one of the causes of lower ranking of judiciary. He said that they have released the reports to tell the government and the people that which is the most corrupt department and it should not be taken into personal context or any political intention. “We are trying to help out the government by showing them the corrupt sections in them, now it’s up to the government how it cleans them”.

On the inclusion of military in the survey, the TIP chairman said, “We have not included it in the survey, Gallup itself has added military and they have not put railways in the survey”. He said the military should not be placed before the education in the rank because according to him military is less corrupt than the education.

He added that Gallup agreed late to conduct the survey, “No one was ready to conduct the survey, the Institute of Business Administration (IBA) which conducted the previous year’s survey refused to conduct it this year. We had short time and Gallup agreed in the last”, said Muzaffar.

The latest perception report from Transparency International Pakistan (TIP) shows a limited number of respondents see centres of corruption in Pakistan in the following descending order, of being perceived as the most corrupt to the least: 1) land administration; 2) police; 3) income tax; 4) judiciary; 5) tendering & contracting; 6) customs, plus state corporations and the last is the army. Once again TIP has expressed its shock at the mounting lack of honesty in public affairs and has listed some of the reasons why the graph of evil is creeping upwards every year.

It is not surprising that land administration is the first among the perceived culprits. It is vastly the domain of the provinces where the politician has yet to begin to take responsibility for sorting-out maintenance and collection. Land record is still in primitive shape and the low bureaucracy that handles the sector is not upgraded and made competitive. Most of the trouble takes place away from the big cities because the writ of the state languishes in smaller districts and abdicates to three power centres: the feudal landlord (often a politician), the police and the judiciary. It will take a long time to sort-out this mess and it will not happen at the same speed in all the provinces. The police has endemic ills that most states in the Third World have failed to tackle. The recruitment of policemen has been pegged to good education only recently, but the provinces — whose domain this is — have been remiss in making the kind of allocations needed to upgrade the institution’s performance. The ratio of policemen to population is abysmal, training standards — though imitative of the army — are nowhere near being practically useful and low status has kept the average policeman tied to slavish behaviour towards the seniors and a brutish one towards the common man.

But the police may not be intrinsically as bad as the circumstances of its functioning make it. State policies favouring non-state actors involved in terrorism on the side have hamstrung the police. Unwillingness to prosecute has instilled in the department a habit of not trying too hard to convict, say, terrorists from a shady jihadi organisation simply because it is being clandestinely supported by the state. Because of this ambience of state-backed criminality, many policemen themselves indulge in crime and get away with it. Many senior policemen live beyond their means and own properties they could not have bought with honest money. As for the tax administration, if one were to look at the statistics, things may be getting better — and that is why it is no longer number one in corruption. Pakistan’s revenue collection is one of the lowest in the world (with the tax-collection machinery believed to be riddled with corruption and inefficiency) and that impacts directly the capacity of the state to spend on development. The reigning theory is to erect a system in which the income tax officer comes into least contact with the taxpayer.

Here's an Associated Press report on Pakistan's assertive judiciary challenging the military and civilian leadership:

....Some believe the court’s actions are part of a necessary, if messy, rebalancing in a country that has long been dominated by the army or seen chaotic periods of rule by corrupt politicians. Others view the court as just another unaccountable institution undermining the elected government.-------------The army has been the principal point of contact for the U.S. in the decade since it resuscitated ties with Pakistan to help with the Afghan war. While the army remains the strongest Pakistani institution, recent events indicate it has ceded some of that power to the Supreme Court and the country’s civilian leaders.----------------The Supreme Court’s activism was on full display Monday.

The court charged Pakistan’s prime minister with contempt for refusing to reopen an old corruption case against the president. Later, it ordered two military intelligence agencies to explain why they held seven suspected militants in allegedly harsh conditions for 18 months without charges.

Some government supporters have accused the court of acting on the army’s behalf to topple the country’s civilian leaders, especially in a case probing whether the government sent a memo to Washington last year asking for help in stopping a supposed military coup.

But no evidence has surfaced to support that allegation, and the court’s moves against the military seem to conflict with the theory. The judges have also taken up a case pending for 15 years in which the army’s powerful Inter-Services Intelligence agency, or ISI, is accused of funneling money to political parties to influence national elections.------------The court’s actions against the army are a significant turnaround. For much of Pakistan’s nearly 65-year history, the court has been pliant to the army’s demands and validated three coups carried out by the generals.-------------The Pakistani media have largely applauded the court’s activism against the army, which has also had its power checked by a more active media and the demands of a bloody war against a domestic Taliban insurgency.-----------“I think the Supreme Court is going too far,” said Pakistani political analyst Hasan-Askari Rizvi. “In the past, it was the army that would remove the civilian government, and now it’s the Supreme Court, another unelected institution trying to overwhelm elected leadership.”

Supreme Court justices are appointed by the president based on recommendations from a judicial commission working in conjunction with parliament. The judges can serve until the age of 65 and can be removed only by a judicial council.

The cases have distracted the government from dealing with pressing issues facing the country, including an ailing economy and its battle against the Pakistani Taliban.

Moeed Yusuf, an expert on Pakistan at the United States Institute of Peace, said the jockeying for power between the army, Supreme Court and civilian government was expected given the shifting political landscape and could be beneficial to the country in the long run.

“No country has managed to bypass several phases of such recalibration before they have arrived at a consensual, democratic and accountable system where institutions finally are able to synergize rather than compete endlessly,” Yusuf wrote in a column in Dawn.-----------“No single group will totally dominate the system,” said Rizvi. “That will slow down decision making further in Pakistan because nobody can take full responsibility for making a decision.”

PIA, Pakistan's national airline, is a victim of corruption and incompetence from political patronage. Here's a Reuters' report on it:

PIA (PIAa.KA), like Pakistan, always seems to be on the brink of disaster. But now that seems closer than ever for the national flag carrier, once a source of pride for the country.

The airline is haemorrhaging hundreds of millions of dollars a year while being pummelled by competition from sleek Gulf giants like Emirates EMIRA.UL, Etihad and Qatar Airways.

A quarter of its 40 aircraft are grounded because the airline can't find enough money to buy spare parts. Flights are regularly cancelled and engineers say they are having to cannibalise some planes to keep others flying.

"The situation has worsened to the extent of rendering this airline almost financially unviable," said the State Bank of Pakistan in a report on the state of the economy.

In many ways the airline mirrors the way Pakistan -- a strategic U.S. ally often described as a failing state -- is run.

The same inefficiency, nepotism and corruption that critics say have prevented the government from tackling a Taliban insurgency, crippling power cuts, ethnic violence and widespread poverty also threaten to bring down the airline.

PIA lost 19.29 billion rupees in the first nine months of 2011, almost double the losses in the same period in 2010.

The airline, like the Pakistani economy, has relied on bailouts to stay in the air, and is negotiating with the state for another rescue package.

"Just like PIA has the potential to do well, Pakistan's economy does too. But both haven't because of mismanagement. In the end that is the story -- mismanagement," Salman Shah, a former Pakistani finance minister, told Reuters.

PIA officials were not available for comment on the challenges facing the airline despite repeated requests.

HUGE WORKFORCE WEIGHS DOWN AIRLINE

Over the years, critics say, governments have manipulated state corporations like PIA for political and financial gain, giving jobs to so many supporters that the size of the workforce has become unsustainable in the face of mounting losses.

"We don't have people in the right places in typical Pakistani fashion. It's about who you know not what you can do," said a PIA pilot, who like other employees asked not to be identified for fear of being fired.

Today, PIA has a staggering employee to aircraft ratio of more than 450, more than twice as much as some competitors. In the first nine months of 2011, employee expenses drained 16 percent of turnover.

"Politically motivated inductions have been the major cause of the significant increase in human resource burden in this organisation," said the central bank.

Here are "Ten Things for India to Achieve its 2050 Potential", brought out by Jim O'Neill, Head Global Research at Goldman Sachs, and Tushar Poddar, V-P Research, Asia Economic Research Team at Goldman Sachs India, as reported by India's Economic Times:

Here are excerpts of a David Brooks' NY Times column on why political participation is important for idealistic youth:

Often they are bursting with enthusiasm for some social entrepreneurship project: making a cheap water-purification system, starting a company that will empower Rwandan women by selling their crafts in boutiques around the world.

These people are refreshingly uncynical. Their hip service ethos is setting the moral tone for the age. Idealistic and uplifting, their worldview is spread by enlightened advertising campaigns, from Bennetton years ago to everything Apple has ever done.

It’s hard not to feel inspired by all these idealists, but their service religion does have some shortcomings. In the first place, many of these social entrepreneurs think they can evade politics. They have little faith in the political process and believe that real change happens on the ground beneath it.

That’s a delusion. You can cram all the nongovernmental organizations you want into a country, but if there is no rule of law and if the ruling class is predatory then your achievements won’t add up to much.

Furthermore, important issues always spark disagreement. Unless there is a healthy political process to resolve disputes, the ensuing hatred and conflict will destroy everything the altruists are trying to build.

There’s little social progress without political progress. Unfortunately, many of today’s young activists are really good at thinking locally and globally, but not as good at thinking nationally and regionally.

Second, the prevailing service religion underestimates the problem of disorder. Many of the activists talk as if the world can be healed if we could only insert more care, compassion and resources into it.

History is not kind to this assumption. Most poverty and suffering — whether in a country, a family or a person — flows from disorganization. A stable social order is an artificial accomplishment, the result of an accumulation of habits, hectoring, moral stricture and physical coercion. Once order is dissolved, it takes hard measures to restore it.

Yet one rarely hears social entrepreneurs talk about professional policing, honest courts or strict standards of behavior; it’s more uplifting to talk about microloans and sustainable agriculture.

In short, there’s only so much good you can do unless you are willing to confront corruption, venality and disorder head-on. So if I could, presumptuously, recommend a reading list to help these activists fill in the gaps in the prevailing service ethos, I’d start with the novels of Dashiell Hammett or Raymond Chandler, or at least the movies based on them.

The noir heroes like Sam Spade in “The Maltese Falcon” served as models for a generation of Americans, and they put the focus squarely on venality, corruption and disorder and how you should behave in the face of it.

A noir hero is a moral realist. He assumes that everybody is dappled with virtue and vice, especially himself. He makes no social-class distinction and only provisional moral distinctions between the private eyes like himself and the criminals he pursues. The assumption in a Hammett book is that the good guy has a spotty past, does spotty things and that the private eye and the criminal are two sides to the same personality.

He (or she — the women in these stories follow the same code) adopts a layered personality. He hardens himself on the outside in order to protect whatever is left of the finer self within.

"While Benazir Bhutto hated the generals for executing her father, Nawaz Sharif early on figured out that they held the real power in Pakistan. His father had established a foundry in 1939 and, together with six brothers, had struggled for years only to see their business nationalized by Ali Bhutto’s regime in 1972. This sealed decades of enmity between the Bhuttos and the Sharifs. Following the military coup and General Zia’s assumption of power, the business—Ittefaq—was returned to family hands in 1980. Nawaz Sharif became a director and cultivated relations with senior military officers. This led to his appointment as finance minister of Punjab and then election as chief minister of this most populous province in 1985. During the 1980s and early 1990s, given Sharif ’s political control of Punjab and eventual prime ministership of the country, Ittefaq Industries grew from its original single foundry into 30 businesses producing steel, sugar, paper, and textiles, with combined revenues of $400 million, making it one of the biggest private conglomerates in the nation. As in many other countries, when you control the political realm, you can get anything you want in the economic realm."-----------Like Bhutto, offshore companies have been linked to Sharif, three in the British Virgin Islands by the names of Nescoll, Nielson, and Shamrock and another in the Channel Islands known as Chandron Jersey Pvt. Ltd. Some of these entities allegedly were used to facilitate purchase of four rather grand flats on Park Lane in London, at various times occupied by Sharif family members. Reportedly, payment transfers were made to Banque Paribas en Suisse, which then instructed Sharif ’s offshore companies Nescoll and Nielson to purchase the four luxury suites.-----------Upon taking office in 1988, Bhutto reportedly appointed 26,000 party hacks to state jobs, including positions in state-owned banks. An orgy of lending without proper collateral followed. Allegedly, Bhutto and Zardari “gave instructions for billions of rupees of unsecured government loans to be given to 50 large projects. The loans were sanctioned in the names of ‘front men’ but went to the ‘Bhutto-Zardari combine.’ ” Zardari suggested that such loans are “normal in the Third World to encourage industrialisation.” He used 421 million rupees (about £10 million) to acquire a major interest in three new sugar mills, all done through nominees acting on his behalf. In another deal he allegedly received a 40 million rupee kickback on a contract involving the Pakistan Steel Mill, handled by two of his cronies. Along the way Zardari acquired a succession of nicknames: Mr. 5 Percent, Mr. 10 Percent, Mr. 20 Percent, Mr. 30 Percent, and finally, in Bhutto’s second term when he was appointed “minister of investments,” Mr. 100 Percent.

Here's an ET piece on history of economic growth under various leaders since 1947:

The Express Tribune took the trouble to go through Pakistan’s historical GDP growth rates and compared various governments. We used GDP growth numbers from the Pakistan Bureau of Statistics records, which go all the way back to fiscal year 1952. We then calculated the geometric average (which calculates the compound average growth rate) rather than the simple arithmetic average to calculate the growth rates during the entire tenure of a government and then we ranked them. The results were somewhat surprising.

For instance, former President Ayub Khan – widely regarded as Pakistan’s best ruler when it comes to economic growth – is actually in second place. The number one spot is held by former President Ziaul Haq, who averaged 5.88% growth during his 11 years in office.

For fans of President Ayub who insist that his record before the 1965 war was better, we checked: it is not true. Pakistan’s growth rate during that period averaged 5.73% per year, which is actually lower than President Ayub’s own overall average of 5.82%. Having said that, industrial growth from the 1958 coup to the 1965 war averaged 9.21%, higher than any Pakistani ruler’s record, including Ayub’s own overall average of 8.51%.

Another surprising insight: if one ranks the ten rulers Pakistan has had since 1952 according to the average economic growth rate during their tenure, both the top five and the bottom five include three dictators and two democrats.

Yes, the top three slots are undoubtedly all taken up by the usual suspects: former Presidents Ziaul Haq, Ayub Khan and Pervez Musharraf, in that order. The next two are somewhat surprising: Benazir Bhutto comes in at fourth place and her father Zulfikar Ali Bhutto is not far behind. The supposedly pro-markets Nawaz Sharif comes in at seventh place.

Yet another surprise: Benazir Bhutto’s average was 5.08%, not far off from Pervez Musharraf’s 5.14%. She beat her rival Nawaz Sharif by a full percentage point: Pakistan’s economic growth averaged 4.06% during Nawaz Sharif’s both terms as prime minister.

Length of time in office appears to matter far more than whether the ruler was a dictator or a democrat. The top three were all in office for at least nine years, with the top two each in office for eleven years. Yahya Khan, Iskandar Mirza and Ghulam Muhammad – none of whom was democratically elected or subject to a popular mandate – all come in close to the bottom of the rankings. None of them had longer than four years in office.

But the more intriguing question to ask is why both the Bhuttos vastly outperform Nawaz Sharif.

The answer lies in the breakup of the GDP number: while Nawaz beat both Bhuttos on industrial growth, he was abysmal when it comes to agriculture. Benazir Bhutto was the best in Pakistani history for agriculture, which grew at an average of 6.65% during her five years in office.

Zulfikar Ali Bhutto, meanwhile, had blowout growth in services, averaging 10.63% during his only term in office, the highest of any Pakistani ruler. (Oddly enough, the elder Bhutto had a poor track record on agriculture, despite his family background. Agriculture grew at a paltry 2.12% per year during his tenure, worse even than Nawaz.)

For those who are currently pessimistic about Pakistan’s economic prospects, you may find some comfort in knowing that the numbers back you up: President Asif Ali Zardari ranks dead last in terms of economic growth, averaging a paltry 2.62% during his term in office so far.

Beckoned by public spigots promising free, pure drinking water, tourists lined up last week to refresh themselves along the main drag in Murree, a summer resort town perched at 7,500 feet in the Himalayas.

They soon discovered that the taps were dry.

“We’ve gotten nothing,” said one thirsty visitor, Abdul Sattar, 47. And he wasn’t just talking about pani (water), which hasn’t reached Murree for weeks because severe power shortages have shut down pumping stations in the valley below.

Nothing has come from democracy, either, a frustrated Sattar said — at least not as it is practiced by the barely functioning federal government in Islamabad, an hour’s drive down the mountains.

The economy is bad enough to make Sattar and others nostalgic for military rule, when the generals at least kept the nation’s lights on.

“The military is better,” said Amir Iqbal, who co-owns Mr. Food, a small eatery which had just two lunchtime customers. At 44, he recalls fondly the relative prosperity and higher economic growth rates that marked the nine-year regime of Gen. Pervez Musharraf. And, although he was young at the time, he speaks positively of the era of an earlier strongman, Gen. Muhammad Zia ul Haq.

“When the army is in government they keep inflation low,” Iqbal said. “They are good at governance and better organized.”

Such yearnings for order are certainly not new in Pakistan’s 64-year history: The army, generally with popular support, has stepped in three times to topple weak governments and impose martial law.

Judicial obeisance to the generals used to be the norm. But, styling itself as a corruption-battling people’s advocate, the current Supreme Court has inverted the narrative. It has spearheaded investigations into misdeeds of the executive branch and the military.

Some experts call Chief Justice Iftikhar Muhammad Chaudhry the country's most powerful man. Critics accuse him of mounting a “judicial coup” in the name of the rule of law.

His court picked off long-serving Prime Minister Yousuf Raza Gilani last month for refusing to follow its orders and is poised to oust his successor for the same thing. A power struggle among the judiciary, the executive branch and, to a lesser extent, the army, threatens to destabilize the nuclear-armed nation at a time when its counterterrorism partnership with the United States has essentially fallen apart.---------------Pakistanis continue to express overwhelming support for the military as an institution, with 77 percent calling it a good influence, the poll found. And the powerful army chief, Gen. Ashfaq Parvez Kayani, is viewed favorably by slightly more than half of those surveyed by Pew in March and April.

But several analysts said they see little likelihood of a coup d’etat. The government may have inoculated itself against one thanks to its own incompetence: The economic situation is so dire that the military lacks the economic resources to fix the country’s intractable problems and would rather avoid taking the rap for failure.

“The army doesn’t want to be held responsible for this,” said Marvin Weinbaum, a Pakistan expert at the Middle East Institute in Washington. “And in some ways there is no reason for them to move in: They’ve got control over the things that they want to control. They still have a veto over any domestic policy that affects them in any substantial way.” ...

Here's an ET report on social sector development during Musharraf years:

According to the report’s HDI list, between 2000 and 2007, which roughly corresponds with General Pervez Musharraf’s regime, the Human Development Index rose 18.9 per cent — an annual average of 2.7 per cent.

From 2007 to 2012 it only went up by 3.4 per cent, just under 0.7 per cent per annum. Somehow, things got even worse in the last three years of that time frame, with HDI increases crashing down as low as 0.59% — a negligible average annual increase of under 0.20 per cent.

The 2013 Human Development Report “The Rise of the South: Human Progress in a Diverse World” is instrumental in the context of Pakistan, especially given the challenges faced today due to poor policy choices that have been confronted in the report.

Meeting a small group of journalists here, Marc André Franche, UNDP Pakistan’s Country Director launched the report and said it is important for what it says and there are lessons to be learnt from countries with preconditions similar to Pakistan.

According to (Moises) Naim, the word ‘corruption’ has become the “universal diagnosis for a nation’s ills” (Naim, 2005). This has the lead to perspective that if one can curtail the culture of greed in a given society, all other problems will be easy to solve. The problem, however, corruption is not necessarily correlated with economic prosperity. In countries such as Hungary, Italy, and Poland, a certain degree of prosperity has been able to coexist with systems of corruption. Furthermore, China, India, and Thailand provide examples of countries deemed to been highly corrupt while simultaneously experiencing high levels of economic growth.

Additionally, the fixation on corruption as the ‘ends-all’ problem drives the public debate away from other critical problems affecting a given state. Media outlets are more likely to publish on topic regarding corruption or scandalous activity, perceiving this to be more newsworthy. In doing so, they neglect to draw attention to other critical problems such as education, healthcare, infrastructure, or the economy. Although these problems may be aggravated by corruption, they were not created by corruption alone. They are the result of underdeveloped institutions that have been exploited by corruptive practices. Thus, the tendency to assume that the abolition of corruption will bring about prosperity is a very limited perspective.

Finally, the focus on corruption as the source of a state’s problems creates unrealistic expectations as to what is required to improve the standard of living within that state. There is a belief that by simply removing a corrupt leader, prosperity will follow. However, there is no direct correlation between theses two factors; the situation is more complex, involving a multitude of factors. If the expectations is that lustration will result in improved standards of living, this sets the stage for societal discontent and possible social unrest.

Here's an interesting debate on democracy vs dictatorship in terms of development:

Dictatorship does not necessarily result in development, defined by human well-being(which incorporates education, health, income, and safety from internal and external threats)and even by personal discipline. Furthermore, there is no conclusive evidence proving that either dictatorship nor democracy cause development. Nonetheless, we will prove dictatorships incorporate more control over the variables that define development so in consequence are a better course to get to it. Also, that dictatorships guarantee the Social Order, which is a very necessary prerequisite for any kind of economic accumulation process to be feasible. A form of government in which absolute power is concentrated in a dictator or a small clique, dictatorships are subject to retaliatory actions. We propose this should end.Democratic nations should not take retaliatory actions against dictatorial governments in order to diminish their legitimacy, their power, and to promote their overthrown in exchange for a democratic alternative. This actions account for the diminishing of economic & diplomatic relations with Burma and Iran and the cut of economic aid to Honduras’ “de facto” Government.We will prove that these sort of actions can only undermine the possibility of development finally kicking in this countries, since dictatorship is the best way to achieve it.

All the Yes pointsDictatorships breed development though efficient and straighfoward decision makingDictatorship is a good breeding ground for personal discipline and orderDictatorships better control the variables of human developmentDictatorships resist to income Redistribution PressuresDictatorship is a more economic institution: elections are a luxury reserved for developed countries.Dictatorships regimes can be a path for countries move on from civil wars and focus on developmentDictatorships have a flexibility in economic policy that breeds growthDictatorship helps achieve social stabilityThe loger lasting and biggest economic miracles have ocurred under dictatorshipsDictatorship outperforms democracy in growth and economic develpmentA dictatorship breeds order and it's a needed step for both development and liberal democracyDictators have incentives to promote development and diminish social differencesSummaryAll the No pointsOpposition defines ambiguityOpposition baffled yet undeterred!Dictator’s decisions undermines the people and are unaccountableDevelopment is not possible when there is no succession in the governmentDictatorship priority is to maintain powerDictatorship brings profit to dictators and its clique, but not to the citizensDictatorship is a threat to diversity and multi ethnicityDictatorship transforms national policies into irregularitiesGood development should ensures freedomDevelopment occurs when a dictatorship revert into democracy

Here's a PakistanToday story on Danish aid to train youth parliamentarians in democracy:

Denmark has launched a US$ 3.5 million a three-year new programme for Pakistan on democratic development and good governance. The programme, a joint collaboration with Pakistan Institute of Legislative Development and Transparency (PILDAT), was announced during the presentation of Pakistan Report of State of Democracy in South Asia an event organised recently by PILDAT with support of the Danish International development agency (Danida). An important feature of the new programnme is the engagement of youth in democratic processes and dialogue.

According to Denmark Ambassador to Pakistan Sorensen, this programme has a special focus on instilling democratic values in the youth through the Youth Parliament programme.

Under this programme, young people from across the country are trained in the values of democracy. This creates understanding, respect and tolerance for other people’s opinions – besides being an innovative approach to engage youth in such an important process, he added.

He said that Denmark is also providing support to primary education in the conflict affected areas.

“We are now also more focused on facilitating contacts between Danish and Pakistani businesses so that we can create jobs, growth and ultimately eliminate poverty”, he added.

Appreciating the Denmark support, PILDAT Executive Director Ahmed Bilal Mehboob said it is in everyone’s interest that we strengthen the democratic progressive forces in Pakistan, so that we do not leave the playing field to the radical forces.

He said through this programme, PILDAT will implement five projects including Assessment of the Quality of Democracy, Youth Parliament Pakistan, Citizens periodic Reports on the performance of state institutions such as the National Assembly, Provincial Assemblies and Pakistan Institute of Parliamentary Studies (PIPS) and processes such as the study of Civil-Military Relations and learning from international examples while maintaining close inter-action with national and provincial legislators from various parties, Comparative Assessment and Score Card on Quality of Governance in Federal and Provincial Governments and Development of Political Parties and leadership It may be mentioned here that the new PILDAT programme is a part of the overall US$ 50 million development programme for Pakistan, which was launched by the Government of Denmark in November 2013.

Pakistan’s National Accountability Bureau (NAB) has reportedly submitted a list of 150 mega corruption cases, involving high-profile figures such as, Prime Minister Nawaz Sharif, his brother and Punjab Chief Minister Shahbaz Sharif, former premiers, ministers and top bureaucrats, before the country’s Supreme Court.The report said that an inquiry was being carried out against the incumbent prime minister and his brother in a case pertaining to the construction of a road from Raiwind to Sharif family House worth Pakistani rupees 126 million, reported the Dawn.Former Prime Minister Raja Pervaiz Ashraf is also being scrutinised for the rental power plants (RPP) case.Also, a case has been launched against former President Asif Ali Zardari for possessing assets beyond resources.It also mentioned 50 cases of monitory irregularities, misuse of powers and land scams.Among the monitory irregularities, inquiries were being conducted in 22 cases, with probes launched into 13 cases and references in 15 cases.In land scams, on the other hand, 29 cases were under inquiry, 13 cases were being investigated and references had been filed in eight cases.The report also showed that inquiries were underway in 20 cases of abuse of power, while a probe had been launched into 15 cases and references filed in 15 cases.

The case, which was filed by Manzoor Ahmed Ghauri earlier this year against NAB chairman and other officials, is being heard by a three-member bench headed by Justice Jawwad S. Khawaja.The report was submitted after the court expressed disappointment over what they claimed was an extreme form of ‘maladministration’ in the anti-corruption body.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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